By Peter Egwuatu
THE Nations’ capital market attained a new height in the custodian of share certificates of quoted companies as the Central Securities Clearing System, CSCS Plc, hits 100 per cent of dematerialisation of share certificates.
Full dematerialization is the complete elimination of existing physical share certificates in the Nigerian capital market and putting to an end the issuance of new share certificates.
General Manager, IT & Operations of the CSCS Plc, Mr. Joseph Mekiliuwa, who exclusively revealed this to Vanguard, said “As at today, we have reached 100 per cent dematerialisation of share certificates in the Nigerian capital market.”
Explaining further on how the CSCS achieved the complete dematerialisation, he said “It was a journey that started over 10 years ago. But when the new management of the Securities and Exchange Commission, SEC came on board they intervened and ensured that it was achieved completely.”
On what happen to investors after the dematerialisation exercise, he said “the issue of dematerialisation requires that the relevant registrar will come in with the register of members of quoted companies into the CSCS system. That implies that whatever certificates that is with an investors prior to dematerialisation exercise the certificate will be useless because the record of all shares are already with us electronically s well as with registrars.”
It will be recalled that the CSCS achieved 98.4 per cent of shares quoted on the NSE in an electronic format in CSCS depository leaving in the third quarter of last year leaving only 1.6 per cent of share certificates in physical certificate form.
It should be noted that in order to address various problems associated with share certificates such as delay in issuance, verification, loss, theft, forgeries amongst others, the SEC in partnership with other stakeholders, resolved to eliminate these problems by opting for the full dematerialization of share certificates.
The registrars of companies, who are involved in the implementation process, are required by the SEC to turn in the registers of all companies they manage to CSCS Depository within a given period of time.