18 February 2013

Nigeria: Committee Awaits SEC's Approval On Dematerialisation

The share certificates dematerialisation committee is waiting for the board of the Securities and Exchange Commission (SEC) to approve its report even as the zero budget allocation to SEC is threatening the dematerialisation exercise.

Dematerialisation, which is the process of converting paper certificates into electronic ones and kept at the Central Securities Clearing System Plc (CSCS), is one of the reforms aimed at making the Nigerian stock market for attractive to investors.

The apex regulatory body had set up the committee headed by the Chairman, Association of Stockbroking Houses of Nigeria (ASHON), Mr. Emeka Madubuike, to ensure a smooth exercise. The committee had last year submitted a comprehensive report on how to successfully executive the dematerialisation process.

However, speaking to THISDAY last Friday on the dematerialisation, Madubuike said nothing has been done in the New Year because SEC is yet to approve the report to enable the members know the next line of action.

"We have submitted our report since last year and we are waiting for SEC to look at it and approve it. With SEC Board now in place, I believe the approval will be given soon and we will swing into action," he said.

But even after the approval by the commission, market analysts said the zero allocation of budget to SEC in 2013 appropriation bill might be another hurdle to cross.

The National Assembly refused to approve any allocation to the apex regulator of the nation's capital market due lawmakers' recommendation to President Goodluck Jonathan to sack SEC's director-General, Ms. Arunma Oteh.

However, Jonathan has not carried out the recommendation, while the lawmakers have maintained their ground that they would not have anything to do with SEC so long as Oteh remains its.

A stockbroker with Crane Securities Limited, Mr. Mike Ezeh, told THISDAY last Friday that there was the need to resolve the face-off, otherwise, it would negatively affect the rally in the market.

"There is need for an amicable resolution of the matter because it does not bode well for the market. Since the market is recovering and all investors' eyes are focused on the market, what it needs is all the support from every stakeholder," he said.

Already, the dematerialisation has started suffering a setback because, according to the committee's plan, nationwide awareness campaign ought to be going on at present.

Last year Oteh had emphasised the need for full dematerialisation in the market saying the apex regulator was committed to addressing all of those things that would ensure efficiency. According to her, one of those things is to ensure that the dematerialisation plan was really firmed up.

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