SHAREHOLDERS and dealers have disagreed on the increasing cost of verifying share certificates for the ongoing de-materialisation exercise, at the capital market.According to the News Agency of Nigeria, the disagreement among the capital market operators in Lagos followed a circular by the Securities and Exchange Commission (SEC) stipulating that the exercise was free.Investigations showed that contrary to the SEC's directives, most stock broking firms were still charging shareholders between N500 and N1,000 as fees, depending on the location of the registrars.SEC, on March 13, issued the circular making January 1, 2013, the deadline for the de-materialisation of all share certificates.According to the circular, all share certificates de-materialised on or before January 1, 2013, will be free, while those that come after attract an unspecified penalty.It also said that the allotment of shares of public offerings would be electronically transferred directly to the shareholders' accounts in the Central Security Clearing System (CSCS).But the National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, said that shareholders were being shortchanged by the dealers, despite their losses.Nwosu described the charges for verification as part of the market's flaws affecting investor confidence.The ISAN boss urged SEC to ensure that it implements the extant rules guiding the operations of the market.He also charged SEC to emphasise inclusive capital market regulation by partnering stockbrokers and shareholders on the development and growth of the capital market.Also, the President of the Progressive Shareholders Association of Nigeria, Boniface Okezie, described the inability of the commission to protect the interest of local investors as unfortunate.Okezie said it was illogical that shareholders' burden increased daily through multiple taxes, despite the commissions being earned by the SEC, the Nigerian Stock Exchange (NSE) and dealers from their portfolio investments.The Chief Executive Officer of the Institute of Capital Market Registrars (ICMR), Dr David Ogogo, urged stakeholders who owned capital to convene a meeting to address the current challenges facing the market.Ogogo suggested that the cost of verification should be treated in isolation, but in the context of service delivery in a depressed capital market.The President of the Lagos-based Association of Stock broking Houses of Nigeria (ASHON),Emeka Madubuike, said that the charges were decided by the various firms.Madubuike, who claimed the dealers were ignorant of the SEC's circular or notice on share certificate verification, noted that the commission had failed to implement or enforce the order.He said that the verification fee was for incidentals, such as transportation and activities that would enable dealers' personnel to follow up on the investors' instructions.'The issue of brokers' charges will be looked into and dealt with so that it doesn't act as an impediment to the de-materialisation policy,' Madubuike said.According to the immediate past President of ASHON, Alhaji Rasheed Yussuf, the verification fees 'are just transport expenses for the prosecution of investors' orders.'He said that the investors would not be asked to pay any fee if they decided to personally do the verification.
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