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CSCS restates commitment for dematerialisation of share certificates

By BusinessNews Staff on October 23, 2015

The Central Securities Clearing System Plc has reiterated its commitment towards full dematerialisation of share certificates in the Nigerian capital market.

Dematerialisation is conversion of share certificate from paper form to electronic form. The system of issuing share certificates had posed a myriad of problems such as delay in issuance and dispatch of certificates, delay in verification of share certificates, loss, theft and forgeries of share certificates respectively.

However, with a view to addressing these problems, the Securities and Exchange Commission (SEC) had issued a directive that all share certificates should be fully dematerialized in line with its vision to rid the market of certificate losses and associated challenges

Speaking at a stakeholders’ meeting in Lagos recently, the Managing Director of CSCS Plc, Mr. Kyari Bukar stressed the need for investors to embrace the exercise, saying that full dematerialisation of share certificates has come to stay.

He emphasized that it will promote transparency in the market, enhance investors’ confidence and further internationalise the capital market.

Speaking in the same vein, the General Manager, Operations, CSCS Plc, Mr. Joe Mekiliuwa, said that full dematerialisation would ensure total elimination of physical share certificates or documents of title which represent ownership of securities and convert these share certificates into electronic book entries.

“At full dematerialisation of shares of a company, all existing shares certificates hitherto not dematerialised are electronically lodged into CSCS under the umbrella of the relevant registrars in the account of the investors thereby maintaining the electronic copy in CSCS for control purposes,”Mekiliuwa said.

He assured participants at the event that CSCS management is dedicated towards supporting the objectives of full dematerialisation, saying dematerialsiation would eliminate risk arising from loss or theft of certificates, speedy processing of offers and bonuses for direct credit of shares into investors’ accounts, increase trade volumes, and eliminate bottlenecks experienced during share certificate verification.

Mekiliuwa allayed fears of investors by assuring them that the steps toward completing the process of full dematerialisation is without any hassle, urging them to avail themselves of this opportunity and the benefits it offers.

[ThisDay]

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