Prior to the advent of the “dematerialization” of share certificates, the proof of ownership of units of shares in any listed company was the issuance of “share certificates”.
A share certificate contains vital information on shares purchased such as the Name of the Holder, address, certificate number, units of shares, etc.
“Dematerialization, also known as “demat” is the process of converting securities held in physical forms (certificates) into electronic form credited to the CSCS accounts opened by licensed Stockbrokers.
Share certificates were issued by Registrars to all Shareholders for Rights or Bonus Issues or at the end of any type of Offer. It is therefore imperative that at the point of purchase of your shares, you impute legibly all your details on the application form.
Concerns on different fora have been raised by investors about the possibility of losing out on their investments due to non-receipt, misplacement, or mutilation of share certificates. It is therefore imperative that investors’ concerns are allayed.
The non-receipt of a physical certificate does not invalidate your ownership of shares bought in your name.
Every listed share on the Nigerian Exchange Limited (NGX) is warehoused with the CSCS (Central Securities Clearing System) depository.
Also, the Registrars keep the registered members of various listed companies updated daily. Therefore, without a physical certificate, your shares can be easily accessed through the CSCS or the Registrars.
To trace your alleged “missing shares”, a global search through CardinalStone Registrars Limited will give you access to all your shares in the Nigerian Capital Market.
A “global search” is a comprehensive search for an investor’s stocks across the capital market, brokerage firms, and Registrars. You must provide some vital information, such as your full name and present/past home addresses to aid the search.
A global search would not only reveal the list of shares, but it would also reveal your CHN (Clearing House Number), provided your shares were earlier registered with a Stockbroker.
Each register of members of all companies listed on the NGX is managed by various Registrars. You can also access information on your shares through the respective Registrars.
Since the discontinuation of the printing of physical share certificates by the SEC, every investor in the capital market is expected to migrate his/her investment to CSCS.
This directive implies that before you can invest in the capital market, you must contract the services of a Stockbroker such as CardinalStone Securities to open an account.
Existing investors are to migrate all their shares still in physical certificate form to CSCS through the dematerialization process.
