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SEC orders adoption of electronic public offering by 2013

BY MICHAEL EBOH

The Securities and Exchange Commission, SEC, has directed that firms seeking to raise funds from the Nigerian capital market to adopt Electronic Public Offering and stop issuing physical certificates to investors from January 1, 2013.

SEC, according to a notice posted on its website, titled: ‘Public Notice on E-Public Offerings/Dematerialization’, said that full dematerialization of the capital market will kick off by January 1, and advised the general public and all capital market operators to ensure that all certificates are materialized by the stipulated deadline.

“Accordingly,” SEC said, “allotment of shares following public offerings shall henceforth be by electronic processes that will domicile shareholding directly with the Central Securities Clearing system, CSCS.”

SEC declared that the policy is aimed at facilitating speedy processing of offers and give investors simultaneous access to their shares for desired transactions.

SEC, however, said should an allottee insist on being issued a share certificate, despite its disadvantages, a certificate shall be issued, in accordance with sections 146 and 147 (1) of the Companies and Allied Matters Act, CAMA.

According to SEC, all share certificates dematerialised on or before January 1, 2013 shall be at no cost to the shareholder, but certificates dematerialized after this date shall be at a cost.

The apex capital market regulator stated further, “Investors are encouraged to contact their stockbrokers to assist them to acquire Clearing House Number (CHN) at the Central Securities Clearing System, CSCS.

“All public companies, registrars and stockbrokers are encouraged to inform shareholders, investors and other stakeholders to ensure the success of the dematerialization exercise.”

On the advantages of dematerialization and electronic public offering, SEC said, “It will lead to the eradication of risk of loss of share certificate either by misplacement, theft or fire; reduction in the occurrence of cloning and forging of share certificates leading to loss of investment.

“It will also ensure the elimination of cost of physical verification of share certificates; removal of delays and costs associated with dispatch of share certificates and facilitation of trading in shares.”


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