9 August 2012

Nigeria: SEC's Dematerialisation Deadline Unrealistic - ICMR

The Institute of Capital Market Registrars (ICMR) said on Tuesday that the January 1, 2013 deadline for dematerialisation of all share certificates was not realistic.

Dr David Ogogo, the Chief Executive of the institute, said this in an interview with the News Agency of Nigeria (NAN) in Lagos.

He explained that their stance was as a result of the inability of the Securities and Exchange Commission (SEC) to enlighten shareholders and other stakeholders on the cost implication of dematerialisation.

Dematerialisationis the elimination of physical certificates or documents on ownership of securities through conversion to an electronic ownership mode domiciled with the Central Securities Clearing System Limited(CSCS).

According to Ogogo,the deadline is not achievable as stakeholders must resolve the issue of cost in the interest of the market.

He stressed that investors were not against dematerialisation but could not bear the financial burden of verification.

However, Ogogo said: "SEC should intensify its enlightenment campaign for investors on the advantages of dematerialisation for dealers, the investing public and quoted companies."

Mr Boniface Okezie, the President of the Progressive Shareholders Association of Nigeria, said that SEC had not done enough to educate the investing public.

Okezie said that investors would not dematerialise until the commission ensured proper enlightenment, noting that many investors had yet to understand the meaning of dematerialisation and how to go about it.

He also said that SEC had failed to meet the expectations of investors, especially in the area of sensitisation in a troubled Nigerian bourse.

"It is not realistic; let us be frank because there is nothing on ground that is mobilising and wooing the investors on the benefits of dematerialisation," he said.

It would recalled that SEC in a public notice dated March 13, set Jan.1, 2013 as deadline for the dematerialisation of all share certificates.

The notice said that all share certificates dematerialised on or before Jan. 1, 2013, would be at no cost to the shareholder, but that there would be a penalty for those done after that date.It also said that the allotment of shares of public offerings would from now be by electronic processes that would transfer shares directly to the CSCS.

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