At the capital market operation of the Security and Exchange Commission (SEC) yesterday, it was unveiled that SEC has designated N5 billion as operation capital to kick off the proposed Nigerian Capital Market Development Fund (NCMDF).
The SEC which is the apex and alter ego of the capital market operators in country gave indices that indicated its shares dematerialization programme has run its full course achieving a 100 per cent dematerialisation of shares with over 2.2 million investors mandating their accounts for e-dividend to-date.
Mr. Mounir Gwarzo, Director General of SEC disclosed that following the earmarks of the kick off capital the Nigerian Capital Market Development Fund (NCMDF) will be launched at the second quarter CMC meeting, with the inauguration of the Board expected to take place sometimes in August 2017.
The DG of SEC stated that membership of the Fund would have representation from SEC, trade groups, shareholders’ association, and Self Regulatory Organisations, CROs.
That further funding of NCMDF would come from monies that would be forfeited by investors that had at one time or the other subscribed for shares with false identity, adding that henceforth, any investor that subscribes for shares with non-existent identity would be made to face the full wrath of the law.
“With regard to the use of non-existent identity in making multiple subscription of shares, we know that multiple application for share subscription is illegal. You cannot apply more than once, but we have noticed that a lot of people have applied with different names. We have also noticed that some people have applied with names that do not even belong to them, which is also illegal.
“We have, therefore, resolved that investors who joggled their names for the purpose of multiple subscription should be given a forbearance period of six months within which they can lay claims to both their shares and accruing dividends subject to establishment of their identity and a verification process by the SEC, failing which such shares and accruing dividends shall be transferred to the NCDMF.
“We also resolved that shares and accruing dividends of non-existent shareholders should be forfeited and transferred to the NCDMF, and going forward, any person who engages in such act shall be prosecuted,” he said.
The SEC, Director General also disclosed that all shares in the capital market including those belonging to investors that have never had Central Securities and Clearing System (CSCS), accounts have been migrated to the Central Securities and Clearing System (CSCS), but domiciled with the Registrars.
Shares of investors that have multiple accounts with different stockbroking firms are warehoused with the Registrars.
7.7 million accounts have so far been migrated to the Central Securities and Clearing System (CSCS), account, while the volume of such migrated shares came to 187 billion units. So, there is need for the migration to be done to increase market liquidity, Gwarzo said.
The Director General of SEC furthermore disclosed that any firm that would list on the stock exchange would be fully dematrialised, that the recently listed companies includes – Medview Airline and Jaiz Bank Plc – were fully dematrialised.
Mr. Mounir Gwarzo, Director General of Security and Exchange Commission (SEC) further affirmed that it would henceforth prosecute investors using false identity for share subscription and that June 30 cut-off date for issuance of dividend warrant still stands.