Key Points
- Direct cash settlement services discontinued for accounts of Heritage Bank investors.
- Investors must complete KYC with new account details to receive payment from share sales.
- Affected accounts temporarily suspended in compliance with SEC’s directive.
- Investors must update trading accounts previously linked to Heritage Bank with an alternative bank account from any other settlement bank.
- CSCS is Nigeria’s Central Securities Depository, handling the depository, clearing, and settlement of transactions in the Nigerian Capital Market.
Following the recent revocation of Heritage Bank’s operational licence by the Central Bank of Nigeria (CBN), the Central Securities Clearing System (CSCS) has informed the general market and all trading participants—brokerage firms and investors—who maintain trading or deposit accounts with Heritage Bank that direct cash settlement services have been discontinued for these accounts.
Implications of Suspension
Investors must complete their KYC (Know Your Customer) process with new account details before they can receive payments from the sale proceeds of their shares, which will now be transferred to another account due to the suspension.
No More Payments into Heritage Bank Accounts
CSCS stated that all affected accounts have been temporarily suspended in compliance with the Securities & Exchange Commission’s directive, which requires comprehensive KYC procedures. This includes the provision of active bank account details for the direct settlement of trades.
Also Read: CBN revokes Heritage Bank’s licence over financial instability
Another Account Required
Investors are advised to update the bank account numbers of all trading accounts previously linked to Heritage Bank Plc with alternative bank account numbers from any other settlement bank of their choice.
About CSCS
The Central Securities Clearing System Plc (CSCS) is Nigeria’s Central Securities Depository (CSD), licensed to carry out the depository, clearing, and settlement of all transactions in the Nigerian Capital Market.
Understanding Direct Cash Settlement
Direct Cash Settlement (DCS) is a process where proceeds from trades executed by brokers on the Exchange are settled directly into investors’ bank accounts.
Also Read: Heritage Bank: NDIC steps in as liquidator, to establish bridge bank
CBN Revokes Heritage Bank License
The CBN revoked Heritage Bank’s licence due to the bank’s breach of Section 12 (1) of the Banks and Other Financial Institutions Act (BOFIA) 2020. The Board and Management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability.