Groups list impediments to share certificate dematerialisation


By Agency Reporter   Thursday, 23 Sep 2010


Three shareholders’ groups on Wednesday said lack of trust and poor awareness were responsible for the high volume of share certificates being kept by shareholders in the country.

They told the News Agency of Nigeria in Lagos that nine months after the Nigerian Stock Exchange directed that paper share certificates be dematerialised, majority of investors were still holding on to their certificates.


They argued that if the NSE had engaged the services of the different shareholders’ groups, the problem would have been a thing of the past.

The NSE had fixed a December 31, 2009 deadline for the dematerialisation process to end.


Dematerialisation of share certificates is the conversion of paper certificate into an electronic record through a company’s registrar and kept by the Central Securities Clearing System.


It means that transactions, such as the issuance of bonus, are to be credited electronically between a shareholder and registrar of a company, instead of the issuance of paper certificate.


One of the benefits is that it enables the shareholder to dispose or buy shares easily because the share certificate will have been verified.


The Publicity Secretary, Independent Shareholders Association of Nigeria, Alhaji Wahab Ajani, said that although some shareholders had dematerialised, some had yet to come to terms with the issue.


Ajani noted that there was a need for the NSE to carry out more enlightenment campaign on the importance of dematerialisation.


“The message should be conveyed in Nigeria’s major local languages to drive home the message to the rural dwellers.

“Dematerialisation cannot be done in one day, it is a gradual process. It makes for easy transaction.


“It is good to dematerialise and shareholders should be made to understand this.


“With dematerialisation transactions last for only three days,” he said.


The Chairman, Ibadan Zone Shareholders’ Association, Chief Aderemi Oyepeju, said that dematerialisation was an important aspect of share transactions and a key element to preserving one’s shares.


Source: Punch



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