By Peter OBIORA investadvocate
Nov 11 2010 12.49 GMT
Lagos (INVESTADVOCATE)-The full dematerialisation of the Nigerian Capital Market (NCM) would be concluded February year 2012. A source (name withheld) at the Central Securities Clearing System Limited (CSCS) confirmed this Wednesday November 10 2010 to investadvocate in Lagos Nigeria.
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The source affirmed that there is a committee set up to deliver on this and the committee is waiting for the Securities and Exchange Commission (SEC) to give its nod on a planned Road show to all the major States where the Nigerian Stock Exchange (NSE) has its branches.
“We are awaiting SEC to give its approval; so that by the end of November 2010, we will embark on a road show to sensitise investors in the Nigerian Capital Market on the need for full dematerialisation of the Nation’s Stock Market†the Source said.
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The issue o dematerialisation has been in the front burner for sometime now and for the NSE to ensure that paper certificates are eliminated.
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Earlier in June 2010, at a one-day workshop organised for Journalist, Peter Egunjobi, General Manager (GM) at the Nigerian Clearing House said that the CSCS has been configured to function as a fully dematerialised Stock Market.
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At the workshop, Egunjobi affirmed that the CSCS infrastructure is in line with that of the International Securities Organisations (ISOs) standard.
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In year 2008, the Stock Exchange gave notice to shareholders that they should ensure that as from January 2009, their share certificates have become dematerialised. The process of dematerialisation is the conversion of a physical share certificate to electronic form for the same number of units, which are then credited to shareholders CSCS account.
Dematerialisation was believed to be for the interest of investors in the Nation’s Stock Exchange, but following the December 31 2008 deadline, Dealing Member firms began to charge investors fees for the exercise.
Stockbroking houses charged about N1,000 per  share certificate, while some charged N500 to help process the physical certificates to electronic form.
As a result of this, SEC moved the dematerialisation deadline; the Apex Capital Market Regulatory Institution intervened through a statement it issued affirming “The attention of SEC has been drawn to the purported deadline of December 31, 2008 for the conclusion of the dematerialisation of share certificates in the Nigerian capital market. While the dematerialisation process is being pursued by the Commission in conjunction with other stakeholders, no deadline has been issued for its conclusion by the Commission.
“The Commission wishes to assure the investing public that share certificates remain a legal evidence of shareholding in public companies. However, the dematerialisation of share certificates is in the overall interest of investors and they are encouraged to embrace it as this will further enhance the efficiency and transparency of the market. “For the avoidance of doubt, the dematerialisation exercise will be pursued to its logical conclusion while the interest of all investors will be adequately protected.”