The Central Securities Clearing System Plc has called on investors to participate actively in the dematerialization process as it will promote transparency and efficiency in the capital market.
The CSCS also reiterated its commitment to the full dematerialization, which is the conversion of physical share certificates to electronic certificates.
It spoke on the issue at a stakeholders’ meeting in Lagos, a statement made available to our correspondent on Sunday said.
It quoted the Managing Director, CSCS, Mr. Kyari Bukar, as saying that there was the need for investors to embrace the exercise because the full dematerialization of share certificates would promote transparency, enhance investors’ confidence and create more visibility for the capital market.
The process of issuing physical certificates for shares has been bedeviled by problems such as delay in issuance and dispatch of certificates, delay in verification of share certificates, loss, theft and forgery of share certificates, among others.
It was to address the problem that the Securities and Exchange Commission issued a directive that all share certificates should be dematerialized.
According to the General Manager, Operations, CSCS, Mr. Joe Mekiliuwa, full dematerialisation will 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.
He said, “At full dematerialization of the shares of a company, all existing share certificates hitherto not dematerialized 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 listed other benefits to include the elimination of risk arising from loss or theft of certificates, speedy processing of offers and bonuses for direct credit of shares into investors’ accounts, increase in trade volumes and elimination of bottlenecks experienced during share certificate verification.
Source..Vanguard
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