By Babajide Komolafe

Three weeks ago, the Securities and Exchange Commission (SEC) set up a committee to develop a ten year Master Plan for the capital market.

In summary, the work of the committee is to develop strategies that  are necessary to making Nigeria the capital market hub of Africa.

Good work. In our quest to achieve this laudable goal, one of the critical ingredients is a regulatory framework for company registrars that is  investor focused and investor friendly.

We are not referring to institutional investors or wealthy and highly placed investors, but retail investors; the individual who knows little about investment and wields little or no influence.

They may not agree, but the reality is that most company registrars are not investor friendly. This is very evident in the effort of Vanguard Investors Forum to address  the complaints of investors. For example, it is difficult to access most company registrars. When you survey the location of their offices, you would almost conclude that they deliberately choose their location to discourage shareholders from coming.

Secondly, most of them don’t have mobile phone lines on their contacts but land lines. A major culprit in this regard is ESL Securities, the registrar of Ecobank. It took several attempts and pressure before the company provided a mobile line that can be provided to shareholders. And if you have ever visited the offices of these registrars, you would notice the general attitude of contempt and disdain in the way they relate  to shareholders.

This is most obvious in their callous attitude in the way they respond to complaints from investors. Shareholders are the owners of the companies, but registrars treat them as if they are not. This is because registrars believe they are serving the companies and not their shareholders. They believe that the company is the one paying them and not the shareholders. In any case, since their services are statutory, companies cannot do without their services.

This mindset is reinforced by the fact that companies rarely sack registrars because most of them are subsidiaries of one of the companies they serve. In addition to these, there is no specific law or regulation designed to curb the abuses of registrars, and specify sanctions for any untoward attitude to shareholders. The result is that  registrar business in Nigeria wields and enjoys monopolistic power, and they behave like monopoly.  But the real victim is the capital market.

The attitude of registrars is a major source of suffering and dissatisfaction among investors, and this undermines confidence in the market. Now, it is difficult to see how we intend to achieve the goal of being the capital market hub of the continent when company registrars  frustrate investors and treat them with disrespect. That is why part of the strategies must include an investor focused  and investor friendly regulatory framework for company registrars.