CMC seeks dematerialisation of unlisted firms shares

Given the success recorded on the dematerialisation of listed companies’ shares, the Capital Market Committee (CMC) has stressed the need for the exercise to be replicated in shares of unlisted companies.

Acting Director-General of the Securities and Exchange Commission, (SEC), Ms. Mary Uduk, who briefed newsmen at the post Q1 CMC meeting in Lagos, , said this is necessary in a bid to deepen the market. Uduk, who acknowledged the success of the dematerialisation exercise, however, noted that the implementation of this initiative was restricted to shares of listed companies.

Consequently, the CMC is advocating for the extension of the exercise to shares of unlisted public companies to enhance liquidity, ease market processes, sharpen decision making in securities investment, among others.

“Dematerialisation is the process of converting physical shares into electronic format. The Investor surrenders his physical shares and in turn gets electronic shares in his demat account.

“The advantages of dematerialization are many- enabling the investor to trade at any time without necessarily passing through the bottlenecks of verifying the share certificates any longer, because the shares are now domiciled with CSCS,” she said. Uduk also stated that the commission would take disciplinary actions against company secretaries, who aid the trade of shares of unlisted public companies outside a SEC recognised platform as required by the law.

“The market was also informed of some successes recorded thus far in the regularization of multiple share subscription. Through this exercise, some Nigerian investors in Diaspora have been able to consolidate their shareholding accounts. Similarly, several local investors with numerous accounts have also been able to consolidate their investments. “We therefore enjoin the general public to take advantage of this initiative to regularize their shareholding accounts before the December 31, 2019‬ deadline.”

We crave the indulgence of the ladies and gentlemen of the press to sensitize the public on this initiative.“We continue to seek the support of the media and the collaboration of the entire market as we strive to build the capital market of our dreams.

“The CMC was mainly established to serve as a medium for exchange of ideas among market stakeholders as well as for feedback to SEC on how to continuously improve the market activities and regulation.

“It is an industry-wide committee comprising members of the commission, representatives of capital market operators and trade groups and other stakeholders,” she stated. The CMC meets every quarter to deliberate on various issues affecting the market and other policy matters.