Central Depository and Settlement Corporation (CDSC) CEO Rose Mambo said on the dematerialization date, all the physical certificates will cease to be used as evidence of ownership of securities of any company quoted at NSE.
Mambo says the process is aimed at reducing the issues of certificate loss, making it easier to transfer and sell shares, reduce the cost of printing the certificates among other benefits.
“Dematerialization has been a big word, not only for shareholders but for many listed companies. People are always wondering what we are talking about and you know when Kenyans find something complicated they ignore it. This has been our biggest challenge,” Mambo said.
She said CDSC, NSE in collaboration with the Capital Markets Authority will roll out a programme before then, to educate Kenyans who own shares at various companies on how to go about the whole process.
CDSC shall send monthly statements to active CDS accounts while the rest will receive their statements once a year.
The corporation shall also create a mobile service where shareholders will subscribe and receive alerts on their mobile phones when there is any activity on their accounts, including, corporate actions, buying or sale of shares among others, at a cost of Sh10 per alert.
“The paper based system has had a variety of challenges like duplication of shares, loss and mutilation of certificates, signature mismatches and a time-consuming transfer process,” NSE CEO Peter Mwangi said.
Mwangi pointed out that the latter had become a major contributor to rising arbitration cases and investor disputes.
“The work volume in the back office operations for the stockbrokers and investment banks was significantly reduced with the cessation of manual matching of buy and sell transactions to the individual transfer documents and corresponding share certificates,” Mwangi added.
The dematerialization process is recognized under the companies Act Cap 486.