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SEC committed to dematerialisation- Ag. DG

SEC approves Nigeria’s first naira-denominated private debt fund

The Securities and Exchange Commission (SEC) is committed to dematerialisation in the capital market as one of the means of boosting investors’ confidence.

Mounir Gwarzo, ag. director-general of SEC, gave the assurance Tuesday when he received the management of Central Securities Clearing System (CSCS) plc at the Commission’s head office in Abuja.

Dematerialisation refers to the conversion of share certificates (physical paper‐form/certificates or documents of title representing ownership of securities) to an electronic form which is domiciled directly with the CSCS.

CSCS plays a very critical role in the capital market, Gwarzo admitted, and disclosed that SEC Nigeria was now ready to conclude the dematerialisation process in the market.

“We have already commenced the dematerialisation process, if not for certain things it would have been concluded by now. We are ready to work with stakeholders to ensure that we conclude the process. One of the critical parts of this exercise is public enlightenment and we will be in the market in the next few weeks to tell people to open their accounts, sort out the issues with e-dividend and get ready for dematerialisation. We will make use of jingles in the radio, newspaper adverts, among other enlightenment tools,” he said.

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The ag. DG re-emphasised that public enlightenment was critical after which all stakeholders can then work on other parts of the issue to bring it to a conclusion, announcing that in the next few weeks, the Commission will launch its complaints management framework so that issues can be handled from the lowest levels to the top.

Speaking earlier, Kyari Buka, managing director/CEO of CSCS, assured the Commission of its full co-operation and support to the initiatives by the SEC as the survival and growth of the industry was

“sustainability of the regulatory agency is one of the things dear to us. Our hope and belief is that even in acting capacity, things will continue and there will be sustainability of the entity. The regulatory framework that has been started will continue.

“Dematerialisation is one of the things very important to us. We very strongly believe that many of the things that have happened have something to do with dematerialization. If share certificates are in electronic form, many of the issues relating to the paper certificates will not arise.

“The paper one can be lost, stolen, doctored among others, we simply believe that dematerialization is one important area we should look at and conclude. If we do it rightly, we will help boost investor confidence.”

He urged SEC to put a resolution mechanism in place to make the transition from one custodian to another smooth, as “we should come up with a resolution on how best to handle such issue. The root cause is account opening data. If such vital information is with the regulator, in the event that the House goes dead, the process of resolution becomes easy for everybody. Mechanisms that could electronically control these can lead to speedy resolution of such issues.”

The SEC was established in 1979, as the apex regulator of the Nigerian capital market. It is a Federal Government statutory body supervised by the Federal Ministry of Finance. Its activities are currently governed by the Investments and Securities Act (ISA) 2007.