By Michael Eboh
Stockbrokers have expressed their support for a review ofÂ the Companies and Allied Matters Act (CAMA), in order to accomodate the dematerialisationÂ programme being championed by the apex capital market regulator, Securities and Exchnage Commission (SEC).
Dematerialisation is a paperless drivenÂ system , in whichÂ investorsâ€™ holdings in aÂ company is reflected electronically.
Speaking in an interview with Vanguard, Mr. David Adonri, Managing Director, Lambeth Investment and Securities Limited, disclosed that for any meaningful success to be achieved in the pursuit of the dematerialisation programme of the SEC and the Nigerian Stock Exchange (NSE), certain provisions of CAMA relating to the acceptance of share certificates as a valid evidence of share ownership should be reviewed to conform with modern day realities.
He stressed the need to review CAMA to conform to changes in both the local economy and international economy, ensuring that it corresponds with advancement in information and communication technology.
He said, â€œThere is the need for the review of CAMA, especially as it has to do with the issue of share certificates and the dematerialisation of share certificates. CAMA still sees share certificates as the prima facie evidence of ownership of shares of public companies.
â€œDue to advancement in information technology and the fact that we are in a paperless world, it is now important to amend that section, such that shares documents kept in books and also in online documents or soft copy can be seen as sufficient evidence of ownership of shares of a company. This will now make the proposed dematerialisation exercise in the market to be in compliance with the laws of the country.â€
Speaking in the same vein, Mr. Amaeze Olisaemeka, disclosed that CAMA should be reviewed to reflect investorsâ€™ decision to keep their holdings in a company in an electronic format instead of keeping a share certificate.
â€œIf an investor is buying shares for the first time or entering the CSCS system for the first time, he is required to fill a form which is called the â€˜Particulars of Shareholders Formâ€™ or â€˜Waiver Formâ€™. In other words, if he fills that form, he has waived his right to a share certificate.
â€œUnder the Company and Allied Matters Act 1990, the share certificate is the prima facie evidence of ownership of shares, but by filling that particular form, it means that the investor is deliberately waiving his right to a share certificate, indicating that he can accept a printout from the Central Securities Clearing System (CSCS) as evidencing his shareholding in any quoted company.
â€œThere should be an amendment to that relevance section of CAMA such that share certificates will not be the only prima facie evidence of ownership of shares, but also allowing an electronic printout or CSCS statement to equally be included, that whoever has that can also be said to be a shareholder of a quoted company, as it can also be said to be a prima facie evidence of his holding in the quoted company.â€