SEC revs plan to tackle certificate issues in market


The acting, Director-General of SEC, Mounir Gwarzo

THE assessed readiness of the Securities and Exchange Commission (SEC) to tackle issues associated with loss of share certificates in the nation’s capital market received further boost, as the acting, Director-General of the SEC Mounir Gwarzo, announced that the final blueprint for dematerialisation exercise would be ready by July.

Besides, the commission also disclosed plans to reduce cost of market operations.

Dematerialisation is the process of replacing paper certificates with electronic records at the Central Securities Clearing System.

Gwarzo, while fielding questions from journalists during the second quarter Capital Market Committee (CMC) press briefing held in Lagos recently, said that the commission would release the final blueprint of the dematerialization for effective implementation at the second quarter CMC meeting.

“There is already a committee set up for that and where we are now, we are thinking about implementation ad now we have decided to set up committee that will drive implementation and all technical committee will look at it and suggest ways it will be done.

“The membership of the committee comprises SEC, NSE, and registrars, CSCS. The technical committee has not started work but by the next CMC we should be able to get the report ready,” he said.

The acting director-general said that the blueprint would address the blueprint would address legacy issues that had affected dematerialization exercise.

“The CMC dematerialization committee submitted extensive report, we are now talking of implementation and we have set up a technical committee to handle it,” Gwarzo said.

He said that the report of the technical committee comprising the Nigerian Stock Exchange, registrars, SEC and the Central Securities Clearing System (CSCS), would be out by the next CMC meeting, adding that the major aim of the technical committee was to drive dematerialization implementation exercise.

Gwarzo also explained that the commission would ensure further reduction of transaction cost of capital market transactions to increase domestic investor participation in the market.

“We deliberated on the issue of transaction cost and members agreed that we need to shed some weight in transaction cost in order to move the market forward. Committee on this has already been set up and they will give us feed back at the next CMC meeting.”

He said that the market operators and regulators were committed to cost reduction to propel activities in the market.

The reduction in transaction costs, according to him, was expected to boost market participation.

He added that the commission would embark on rigorous investor education campaign to increase the number of investors in the market.

“We believe that when we reduce some of these costs, it will propel further transactions in the market. “We will be able to come with an idea of what the costs in the market are going to be by the next CMC,” he added.

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