By  PETER EGWUATU

Securities and Exchange Commission (SEC) has disclosed that it may postpone the deadline for share certificate dematerialisation  earlier fixed for 1st January, 2013 if adequate enlightenment is not carried out.

Director-General, SEC, Ms. Arunma Oteh, who disclosed this, said that the idea to postpone the deadline was as a result of the inability of the Committee on dematerialisation to organise an enlightenment programme in all the geo-political zones in the country to enlighten investors on the need and benefits of dematerialising share certificates. The Committee is expected to advise the Commission on what to do to implement full dematerialisation after the exercise.

According to her, “Once the Committee on dematerialisation has finished its enlightenment programme, we may now set a new date. Though, any person who wants to hold physical share certificate to show as evidence of ownership is free to do so, but for those who want to play the market on daily basis,dematerialisation is necessary and a must for them to allow for easy transfer and settlement of transaction.

Meanwhile, Chairman of the Committee on dematerialisation, Mr. Emeka Mmadubuike, said, “The security issue in some parts of the country has been the major challenge why the Committee has not been able to arrange the enlightenment programme. “So now, we are planning to reshuffle the places where we can carry out the enlightenment programme. Once that is done, we will then inform the Commission.”

It would be recalled that the SEC had in a notice stated that “All share certificates dematerialised on or before January 1, 2013 shall be at no cost to the shareholder, but certificates dematerialised after this date shall be at a cost. “Accordingly, allotment of shares following public offerings shall henceforth be by electronic processes that will domicile shareholding directly with the Central Securities Clearing System (CSCS).

This will facilitate speedy processing of offers and give investors simultaneous access to their shares for desired transactions.

“However, 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). Meanwhile, dematerialisation is the process of converting physical share certificates into electronic form i.e. crediting of equivalent number of shares to a depository account electronically.

For dematerialisation of shares, you have to open a depository account with a Central Securities Clearing System (CSCS) Limited.

The benefits of include: Zero risk of loss of share certificate/ misplacement / theft / damage of share certificates, No risk of bad deliveries, No stamp duty on transfer of shares, Faster transfer of shares, among others.