By Babajide Komolafe

The above is typical of a lot of retail investors. They have urgent need for money, and in the absence of any immediate source of cash, they decide to sell their shares.  Their expectation, based on lack of understanding, is that they can go to the stock market hand over the shares to a broker, who will immediately give cash in return.  For some, they don’t even have any clue about how to sell their shares. They never bother, until there is urgent need for money.

Selling shares is not like selling ‘akara’ or any other commodity. There is a process for selling shares. That process can take up to four months, depending on the circumstances. While it is a fact that efficiency or inefficiency of stockbrokers and registrars contribute to the length of the process, it is also a fact    that the ignorance or misunderstandings of investors aggravate the length of this process.

To sell your shares, the shares must first be in a CSCS account. For investors with share certificates, it means you have to take the shares to a stockbroker, who will send it to the registrar of the company that sold the shares. Among other things, the registrar will compare the signature in the share purchase form, signed when you originally bought the shares, with the one you signed in the form you completed for the verification.

Most times, the registrar will request that you get  Bankers Confirmation letter. In the letter, the bank will confirm that you are the owner of the signature you are claiming, and that you a  known customer. Once the registrar  confirms this, the shares are confirmed to your broker, who then send the request to CSCS, where an account is created in your name, and the shares are deposited.

Now this alone can take up to four months, depending on the efficiency of the broker and the registrar. This is reflected in a complaint received from a reader, Oyewole Olusoji Samson, last week. “Please help me to investigate delay in my GTBANK shares verification with Datamax since March 2013.”

A lot of time, investors too contribute to the delay, by act of omission or commission. This can be due to irregular signature, change of name e.t.c. This is also reflected in the complaint from another reader. He said, “I sent a GT BANK PLC share certificate for verification through my stock broker (Security Swaps Limited) since 1st February 2013. They told me that there was discrepancy in the name on the share, this has been corrected in another stock transfer form filled by me in May 2013, but till today (almost a year now) my stockbroker can’t access the shares for sale”.

The above is that if you have shares, which have not been verified and deposited into a CSCS account, you must be ready to wait for up to four months, before you can sell the shares.  That is why, if you depend on your shares to solve emergency cash needs in the future, the wisest thing to do is to begin the process now.