Restructuring Registrars is a Welcome Devt
IT is common knowledge that the problem of capital market can not be resolved without addressing the issue of Registrars. Registrars are very vital to the capital market because of the pivotal rules they play in bringing efficiency to the market.
We are living witnesses that most of the problems experienced in the previous year were partly non release of share certificates and non availability of the shares after the company listed. We all know that Big Treat got listed at N3.42 but because of scarcity of its shares in the market, non release of share certificates and non release of verified shares certificates to the system the price moved to N15, not only Big Treat, so many companies were affected as their prices went higher because of the lack of availability of their stocks to the investing public.
A lot of investors have made it very clear that after the conclusion of offers their allotments have not been released, they never get their share certificates six months after the offer, sometimes a year after. It is a welcome development to see that the new director general Securities and Exchange Commission (Sec) say that the commission has to address the issue of problems facing the registrars.
I believe this is the right statement at the right time, for you to have efficient market the mind  of the clients should be free from  anything that will make them lose confidence in the market.
That is why when the Nigerian stock Exchange (NSE) took a decision that no company shall get listed by  introduction until it makes 10 per cent of its issue share capital available to the public before it was reduce to 5 per cent, people with foresight applauded the idea. This idea is good because from the moment they started applying this rule, scarcity of stock on the floor of the Exchange was reduced to some extent because at the point of introduction you will see that at least 5 per cent of the share capitalisation will be made available, so if this is available to the investing public they can take as much as they want.
Most of the problems on the capital market come from the registrars. Take the case of unclaimed dividend as an example; registrars are the one distributing dividend which is the one of their responsibilities to make dividend available to the investors.
As soon as the issuers issue a cheque it should be cleared by the registrars but today we have seen different things, companies have come to declare both interim and final dividend and bonus and gave the closure date but 2 months after that investors can not get their warrant, when you go to registrars they either tell you that the dividend warrant is not yet printed or it is in process.
SEC come with e-dividend which is very good, I don’t think there is any investor that does not have a bank account. But if there is any of them that do not have a bank account that investor should know that it is good to invest in capital market and should also know that he needs a bank account to clear the dividend.
If SEC makes this as a rule that every investor must open an account before he or she started investing in capital market, I believe it will make investing in capital market easier and it will definitely reduce the work of Registrars.
Not only that, there is a pending rule by Central Bank of Nigeria that you can not issue cheque that is above N10 million. Therefore it is now mandatory for every investor especially institutional investors to give their bank account so that as soon as dividend is declared their account will automatically be credited.
Just as our address is important we equally need bank account and if it is made available the issue of unclaimed dividend will be over and it will now left to those companies that will declare dividend without cash backing, so it will be very obvious to us if dividend is not paid we will know that the company that declare dividend are the one that not pay and the shareholders will be able to challenge the directors who declare dividend without pay.
The other issue is bonus certificate declared by the companies which have been left either in the post office or in the hand of registrars. E-bonus introduced by SEC is also a good development were bonus would be  credited directly to Central Securities Clearing System (CSCS) account of the investors and I believed that investors that doesn’t have this account should also try to get one, it does not  take anything to open this account, the time has come to dematerialize our certificates.
We must make all our certificate e-payment look for instance, e-products in banking industry makes bank work easier and if we in the capital market embrace this system and dematerialize our share certificates and convert everything to CSCS, the problem we are facing now will be over.
Definitely it will bring liquidity to the market and increase the efficiency in the nation’s capital market.