By Nkiruka Nnorom

SECURITIES and Exchange Commission, SEC, yesterday, disclosed that it has set aside N5 billion as seed capital for the take off of the proposed Nigerian Capital Market Development Fund, NCMDF. The Commission also warned that it would henceforth prosecute investors using false identity for share subscription.

The apex capital market authority also indicated that its shares dematerialization programme has run its full course achieving a 100 per cent dematerialisation of shares with over 2.2 million investors mandating their accounts for e-dividend to-date. The Director General of the Commission, Mr. Mounir Gwarzo, who stated these at the 2017 first quarter post Capital Market Committee, CMC, media briefing, said following the setting aside of the take off capital the NCDF will be launched at the second quarter CMC meeting, with the inauguration of the Board expected to take place in August 2017.

According to him, membership of the Fund would have representation from SEC, trade groups, shareholders’ association, and Self Regulatory Organisations, CROs. Gwarzo said that further funding of NCMDF would come from monies that would be forfeited by investors that had at one time or the other subscribed for shares with false identity, adding that henceforth, any investor that subscribes for shares with non-existent identity would be made to face the full wrath of the law.

“With regard to the use of non-existent identity in making multiple subscription of shares, we know that multiple application for share subscription is illegal. You cannot apply more than once, but we have noticed that a lot of people have applied with different names. We have also noticed that some people have applied with names that do not even belong to them, which is also illegal.

“We have, therefore, resolved that investors who joggled their names for the purpose of multiple subscription should be given a forbearance period of six months within which they can lay claims to both their shares and accruing dividends subject to establishment of their identity and a verification process by the SEC, failing which such shares and accruing dividends shall be transferred to the NCDMF.

“We also resolved that shares and accruing dividends of non-existent shareholders should be forfeited and transferred to the NCDMF, and going forward, any person who engages in such act shall be prosecuted,” he said.

On full dematrialisation, the SEC boss noted that all shares in the market including those belonging to investors that have never had Central Securities and Clearing System, CSCS, accounts have been migrated to the CSCS, but domiciled with the registrars. He added that shares of investors that have multiple accounts with different stockbroking firms are warehoused with the registrars.

Consequently, he said that 7.7 million accounts have so far been migrated to the CSCS account, while the volume of such migrated shares came to 187 billion units. So, there is need for the migration to be done to increase market liquidity, Gwarzo said.

Going forward, according to him, any company that would list on the stock exchange would be fully dematrialised, saying that the recently listed companies – Medview Airline and Jaiz Bank Plc – were fully dematrialised. Gwarzo said that June 30 cut-off date for issuance of dividend warrant still stands.

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