By BABAJIDE KOMOLAFE
As you cannot do without a stock broker, you cannot do without registrars once you buy the shares of a company.
Some of the inquiries from our readers indicate that a lot of people that bought shares do not know about the existence of registrars or their importance to the profitability of their investment in shares.
For example, a reader complained, “I bought some shares at FirstBank Plc, Access Bank Plc and First City Monument Bank Plc. I bought the shares directly from the banks during their public offers. Since then, no Certificate, no dividend.”
This implies, him or her, just bought shares, but doesn’t know who is responsible for certificate issuance and dividend payment.
Registrars basically are companies that keep and maintain the register of all the shareholders of a company. They are the ones that issue share certificates to the shareholders of the companies they serve, and they are the ones that distribute bonus shares, and pay dividend to the shareholders, on behalf of the companies they serve.
So, if you buy the shares of a company, your name and the amount of shares purchased will be forwarded to the registrar of the company. The registrar in turn will include your name in its record (register) of the shareholders of the company, and then issue you a certificate, which is posted to you, as evidence of your investment in the company.
Whenever the company, you purchased its shares, wants to pay dividend, it would give the money in bulk to the registrar for onward payment to all its shareholders. The registrar then issues dividend warrants and posts to all the shareholders based on the number of shares they hold.
Also, if you want to register your shares with the Central Securities Clearing System (CSCS), and thus have your shares in electronic form and have a CSCS account, you will have to submit your share certificate to the stock broker who will send it to the registrar for verification or verify that the share certificates indeed belong to you. Thus, you can see that once you begin to invest in shares, you can’t do without a registrar.
Unfortunately, unlike the case of a stock broker, where you can choose your stock broking company, you cannot decide who will be your registrar, or the registrar of the company you invest. It is the company that makes such decision. So, as you are choosing to invest in a particular company, you have also chosen the services of its registrar. If the registrar is inefficient, with little regard for shareholders, like most of them do, that becomes your lot.
The problem is that all the registrars serve about five companies each, and hence have to serve hundreds of thousands of shareholders. To make it worse, most of them have archaic processes of attending to shareholders, their location is difficult to access, with little or no parking space, and with tardy and unfriendly staff.
Hence, their offices are filled with crowds of shareholders, who end up spending up to four hours sometimes, just to revalidate dividend warrant. Unfortunately, they have little or no regulation. Nobody seems to regulate them; hence they get away with their inefficiency, inhuman treatment of shareholders and malpractices. But because of the critical nature of their services, you cannot do without them.
Thus, to ensure they serve you and receive your entitlements i.e. share certificates, dividend, bonus shares, you need persistence when you are dealing with a registrar. You must be persistent and dogged in your request until you become a thorn in their flesh, otherwise it may take eternity before they attend to your request.