CSD appeals for dematerialisation of share certificates
The Central Securities Depository Ghana Limited (CSD) has recorded consistent growth in its operations over the years.
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The Central Securities Depository Ghana Limited (CSD) has recorded consistent growth in its operations over the years.As of September, this year, a total of 619,255 investor accounts were registered with the depository, representing an increase of over 11 per cent over the previous period.
Data at the CSD, however, show that not all the holders of share certificates have converted their holdings into an electronic system; something the depository said was risky to the owners.
The data showed that out of 9.79 billion share certificates listed on the Ghana Stock Exchange (GSE), 7.47 billion of them, representing about 76 per cent had been converted into electronic format.
The Managing Director of the CSD, Mr Stephen K. Tetteh, therefore, appealed to all paper share certificate holders to convert their paper certificates into electronic format.
“If you hold shares in paper certificates in this modern time, the certificate can easily be misplaced, lost or even defaced and that is the risk we want to avoid by introducing the electronic system,” he said.
He said the investor community, especially the individual investors, could deposit their paper share certificates for free at the CSD by opening depository accounts through their respective brokers.
“Once you have that the investor will mandatorily be issued with two statements indicating the value of his/her shares every year. This statement can be submitted for visa application processing as well as do a lot of things which will benefit the shareholders,” he indicated.
Explaining further the benefits of having one’s share certificates dematerialised, Mr Tetteh said owners of such products could use their accounts and the statement issued as collateral to access loan facilities from various financial institutions in the country.
That, he said, lessened the burden of giving one’s building documents, car papers and other certificates to the bank when the borrower did not know what would happen to them.
Upon default, Mr Tetteh said the process even made it easier for the bank to claim the securities without resorting to litigation.
“The law allows us to follow a process and release the securities to the bank so the lender does not need to go to court to fight," he said.
Going forward, Mr Tetteh said the depository would continue with an upgrade of its system to provide seamless transaction for investors in line with its core objective of easing the challenges associated with getting one’s investments registered and managed in the country.
He was confident the process would help raise investor confidence in the country, leading to an uptick in the number and levels of investments in both debts and equities.
