The Central Securities Clearing System (CSCS) Plc has said it plans to conclude the dematerialisation process by the end of third quarter.
It also said that 98.4 per cent of shares listed on the Nigerian Stock Exchange (NSE) are currently in an electronic format of CSCS depository.
Dematerialisation refers to the conversion of share certificates (physical paper‐form/certificates or documents of title representing ownership of securities) to an electronic form, which is domiciled directly with the Central Securities Clearing system (CSCS).
The General Manager, Operations at CSCS, Joe Mekiliuwa explained that CSCS was working closely with registrars to ensure that full dematerialisation was achieved before the end of the third quarter.
According to him, CSCS is doing everything within its powers to assist the relevant registrars in ensuring that the remaining 1.6 per cent was converted to electronic format to enable it record 100 per cent success level before the end of Q3.
In order to address various problems associated with share certificates such as delay in issuance, verification, loss, theft, forgeries amongst others, the Securities and Exchange Commission (SEC), in partnership with other stakeholders, resolved to eliminate these problems by opting for the full dematerialization of share certificates.
“Full dematerialization is the complete elimination of existing physical share certificates in the Nigerian capital market and putting to an end the issuance of new share certificates.
“The Registrars of companies, who are involved in the implementation process, are required by Securities and Exchange Commission (SEC) to turn in the registers of all companies they manage to CSCS Depository within a given period of time.”
In compliance with SEC’s directive in readiness to the full dematerialisation conversion, Mekiliuwa noted that registrars have turned in 98.4 per cent of the registers under their custody, while the shares are currently in the shareholders’ accounts of CSCS depository.
“For the shares to be accessed by the shareholders in their accounts under a stock broking firms, shareholders are required to instruct their registrars, through their brokers, to migrate such shares to their accounts with the stock broking firms.
Consequently, he urged shareholders to approach the stock broking firms of choice, obtain and fill a migration form, which will be forwarded to the registrar.
This, according to him, would enable them advise CSCS to migrate the shares to the shareholder’s account with the stock broking firm.
“With reinforced commitment and determination at the commencement of the dematerialization exercise in June 2015, it has yielded significant success as incidences of forgery, theft and loss of share certificates have been eliminated.
“Other benefits which full dematerialization would bring to the market include immediate availability of the shares for trading as soon as mandate is given to the brokers, enhancement of price discovery and deepening of the market, possibility for securities lending and borrowing by shareholders for more income,” he added.
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