It will become mandatory for all investors in the nationâ€™s capital market to key into the Direct Cash Settlement (DCS) initiative from September 1, 2017, the Director General of Securities and Exchange Commission (SEC), Mr.Â MounirÂ GwarzoÂ said wednesday.
DCS is an initiative that allows proceeds of shares sold to settle directly into an investorâ€™s account as against theÂ system whereby the proceeds go to theÂ Â Â brokerâ€™s account before passing it to the investor. TheÂ Â Â DCS, which commenced last year, has beenÂ voluntary. However, speaking atÂ post-Capital Market Committee(CMC) meeting press conference in Lagos,Â GwarzoÂ said the CMC has agreed thatÂ from September 1, 2017the DCSÂ will become mandatory for every investor.
â€œThe DCS initially it was voluntary but when we saw recent events in the capital market, the CMC came together and said the best way to do it is to make it mandatory. EverybodyÂ will be inside the net.Â Â It is only if you do not want to key into it, you can then opt out. The CMC set up a committee, which did a very robust job and we have resolved that from September 1, 2017, DSC will mandatory for every investor.Â Â Meaning that every investor in the marketÂ Â Â will key into the DCS unless the investor decide to opt out,â€ he said.
According to him, the DCS has not reduced level of complaints on diversion of investorsâ€™ money, but has also brought speed and transparency to the market.
He added that the decision to stop issuance of dividend warrants from July 1, 2017 remains unchanged, urging investors who are yet to embrace the electronic (e) dividend initiative to do so.
GwarzoÂ disclosed that so far, about 2.2 million investors have given mandates for e-dividends, noting however, â€œour intention is for the 7.7 million investors to mandate their accounts and we will continue to work towards achieving that. But as stated before, the issuance of dividend warrants will end June 30, 2017.â€Â
Speaking onÂ dematerialisation, he said the sharesÂ Â inÂ theÂ market have been 100 per centÂ dematerialised.Â Â Â GwarzoÂ
The DG said in all, despite the negative market indicators, the capital market community recorded some level of success on some initiatives embarked upon in 2016.