Innovate to Survive Ongoing Capital Market Revolution, Registrars Told

Goddy Egene

Registrar companies in the country have been urged to innovate or risk going out of business considering the changes currently going on in the Nigerian capital market that are affecting the income streams of the registrars.

The dematerialisation of share certificates, distribution of financial reports electronically and electronic dividends among others are some of the developments shaping the functions of registrars. It is believed that developments would affect bottom-lines of registrars companies.

Hence, the Group Chief Executive Officer of United Capital Plc, Mrs. Oluwatoyin Sanni, has tasked registrars to adopt innovative ways to serve their clients or risk extinction in the not too distant future.
She stated this at a forum organised by African Prudential Plc in Lagos.

Speaking on “Leveraging Opportunities in an Evolving Capital Market, the Changing Roles of Registrars,” she said the innovate or die challenge has become most important now that Securities & Exchange Commission (SEC) is determined to end the issuance of physical dividend warrants.

According to her, the deadline for discontinuance of issuance of physical dividend warrants has been extended a number of times to allow for full subscription with the new date now fixed for December 31, 2017.
Sanni explained that the desire to migrate towards electronic dividend payment is borne out of the need to mitigate risks associated with physical dividend warrants and improving investors’ experience.

“Ahead of this, Nigeria Interbank Settlement System Plc (NIBBS) is now sole processor of shareholder dividends. Registrar companies have been integrated to the NIBBS Electronic Payment network to facilitate processing and payment of dividends on shares and bond coupons, through the automated clearing house,” she said.

The United Capital boss, therefore advised registrars to, as a quick-fix, begin to expand into other parts of Africa, where the registrar function is yet to evolve to the same level as Nigeria.

She also recommended the model of “Computershare, a Global leader in not just transfer agency but employee equity plans, mortgage servicing, proxy solicitation, stakeholder communications and other diversified financial and governance services.”

To survive the trend and competition, Mrs. Sanni urged traditional registrar services to expand their horizon from share data/register management, KYC verification, shareholder relationship management, IPO/Bond Issues, probate management services, among others, and begin to explore technological trends for product innovation to meet demands of today and the future.

According to her, the digital revolution must be embraced and Business-To-Clients (B2C)) models explored, adding that “technology products – e-notifier, e-lodgement for stockbrokers, online account access, dividend cards, electronic voting support should also be adopted.

“The Nigerian capital market is still evolving. Thus, registrars generally have voids to fill within their regulatory ambit,” she said.

Sanni expressed confidence that “Africa Prudential as the first publicly listed registrar company in Africa has a chance to lead within the continent.”