Following the success recorded by the dematerialization of shares of listed companies in the capital market, the Capital Market Committee (CMC), is advocating that the exercise be extended to shares of unlisted companies.
Acting Director-General of the Securities and Exchange Commission (SEC), Ms. Mary Uduk, who disclosed this in Lagos while addressing financial Journalists on the outcome of the CMC meeting, said this is necessary in order to further deepen the market.
Uduk who acknowledged that the dematerialization exercise was successful, however, said 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 as this would enhance liquidity and ease market processes, enhances market dynamism, and decision making in securities investment, among others.
Uduk sid, “Dematerialization 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: it enables 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, he can give a mandate to his broker at any time and the broker accesses the Exchange that same day and trade for him.
