The Central Securities Clearing System Plc has reiterated its commitment towards full dematerialization of share certificates in the Nigerian Capital Market. This was made known at a stakeholder’s meeting held in Lagos recently where the issue of shares migration was discussed.
Earlier, the Managing Director of CSCS Plc, Mr. Kyari Bukar had stressed the need for investors to embrace the exercise saying that full dematerialization of share certificates has come to stay while emphasizing that it will promote transparency in the market, enhance investors’ confidence and further internationalize the capital market.
The system of issuing share certificates had posed a myriad of problems such as delay in issuance and dispatch of certificates, delay in verification of share certificates, loss, theft and forgeries of share certificates respectively. With a view to addressing these problems, the Securities and Exchange Commission (SEC) had issued a directive that all share certificates should be fully dematerialized in line with its vision to rid the market of certificate losses and associated challenges.
Speaking at the event, Mr. Joe Mekiliuwa, General Manager, Operations at CSCS Plc said that full dematerialization will ensure total elimination of physical share certificates or documents of title which represent ownership of securities and convert these share certificates into electronic book entries.
According to Mekiliuwa, “at full dematerialization of shares of a company, all existing shares certificates hitherto not dematerialized are electronically lodged into CSCS under the umbrella of the relevant registrars in the account of the investors thereby maintaining the electronic copy in CSCS for control purposes”.
While assuring participants at the event that CSCS’ Management is dedicated towards supporting the objectives of full dematerialization, Mekiliuwa went further to list its other benefits to include amongst others the elimination of risk arising from loss or theft of certificates, speedy processing of offers and bonuses for direct credit of shares into investors’ accounts, increase in trade volumes, elimination of bottlenecks experienced during share certificate verification.
Investors are enjoined to collect migration form from any registrar or stockbroking firm or simply download the form from the website of CSCS, Securities and Exchange Commission (SEC), and Nigerian Stock Exchange (NSE); fill the forms and submit same to the stockbroking firm they have chosen for onward transmission to their registrar and final migration to their accounts with brokers. Mekiliuwa allayed fears of investors by assuring them that the steps towards completing the process of full dematerialization is without any hassles and that they should avail themselves of this opportunity and the benefits it offers.