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SEC restates commitment to dematerialisation of shares

By BusinessNews Staff on February 5, 2015

The Acting Director-General of the Securities and Exchange Commission (SEC), Mounir Gwarzo, has said the apex regulator of the capital market is committed to the dematerialisation of share certificates as part of efforts to boost investors’ confidence in the market.

Dematerialisation refers to the conversion of share certificates (physical paperâ€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).while the dematerialisation process has been on for some years, many investors are yet to take advantage of it.
Speaking during a visit of the management of CSCS in Abuja, Gwarzo said the commission was ready to pursue the dematerialisation process.

“We have already commenced the dematerialisation process, if not for certain things it would have been concluded by now. We are ready to work with stakeholders to ensure that we conclude the process. One of the critical parts of this exercise is public enlightenment and we will be in the market in the next few weeks to tell people to open their accounts, sort out the issues with e-dividend and get ready for dematerialization. We will make use of jingles in the radio, newspaper adverts among other enlightenment tools,” he said.

The SEC boss declared that public enlightenment is critical, disclosing that in the next few weeks, the Commission will launch its complaints management framework so that issues can be handled from the lowest levels to the top.

Speaking earlier, the Managing Director/CEO of CSCS, Kyari Bukar assured the Commission of its full co-operation and support to the initiatives by the SEC.

According to Bukar, “Sustainability of the regulatory agency is one of the things dear to us. Our hope and belief is that even in acting capacity things will continue and there will be sustainability of the entity. The regulatory framework that has been started will continue. Dematerialization is one of the things very important to us. We very strongly believe that many of the things that have happened have something to do with dematerialization. If share certificates are in electronic form, many of the issues relating to the paper certificates will not arise.

“The paper one can be lost, stolen, doctored among others, we simply believe that dematerialization is one important area we should look at and conclude. If we do it rightly, we will help boost investor confidence”.

He urged SEC to put a resolution mechanism in place to make the transition from one custodian to another smooth

“We should come up with a resolution on how best to handle such issue. The root cause is account opening data. If such vital information is with the regulator, in the event that the House goes dead, the process of resolution becomes easy for everybody. Mechanisms that could electronically control these can lead to speedy resolution of such issues” he added.

Meanwhile, trading at the stock market remained positive as the Nigerian Stock Exchange (NSE) All-Share Index rising by 0.46 per cent to close at 30,028.35. Similarly, market capitalisation added N45.3 billion to close at N10 trillion.

[ThisDay]

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