Lagos — The Securities and Exchange Commission (SEC) has set January 1, 2013 as deadline for share certificates dematerialization. The regulatory body notified capital market operators that all share certificates are to be dematerialized by January 1, 2013.
Dematerialization refers to the elimination of physical certificates or documents of title representing ownership of securities. According to SEC, "all share certificates dematerialized on or before January 1, 2013 shall be at no cost to the shareholder, but certificates dematerialized after this date shall be at a cost.
Accordingly, allotment of shares following public offerings shall henceforth be by electronic processes that will domicile shareholding directly with the Central Securities Clearing system (CSCS)".
It said that the development will facilitate speedy processing of offers and give investors simultaneous access to their shares for desired transactions.
However, "Should an allottee insist on being issued a share certificate, despite its disadvantages, a certificate shall be issued, in accordance with sections 146 and 147 (1) of the Companies and Allied Matters Act (CAMA), it said. The SEC therefore encouraged investors to contact their stockbrokers to assist them to acquire Clearing House Number (CHN) at the CSCS.
SEC said dematerialization and electronic public offering have far reaching advantages, which include eradication of risk of loss of share certificate either by misplacement, reduction in the occurrence of cloning and forging of share certificates leading to loss of investment, elimination of cost of physical verification of share certificates, removal of delays and costs associated with dispatch of share certificates and facilitation of trading in shares.