Capital market stakeholders sue for tech-driven operations

Capital market registrars have been urged to focus on increased technological adoption and more business opportunities to enhance efficiency and remain relevant in the market.

The Group Managing Director of United Capital Plc, Toyin Sanni, who stated this at the African Prud Plc’s Forum, formerly APR Forum, held in Lagos at the weekend, explained that traditional registrar services must be expanded in order to embrace the digital revolution.

According to her, the registrars’ business that started as a departmental function in banks and other large corporations has evolved into independent companies and even an NSE listed public company with developments in the capital market.

Speaking on the theme: ‘Leveraging Opportunities in an Evolving Capital Market: the Changing Roles of Registrars’, she admitted that increased technological adoption has aided efficiency and transformed service delivery in recent times.

She however, added that this recent trends and continued regulatory decisions have posed a significant threat to revenue sources of registrars in the capital market.

Furthermore, she noted that rapid growth in capital market activities in the mid-2000s resulting in increased IPOs, POs, Private placements and debt capital issuances, as well as banking industry reforms, were the major factors that enhanced the revenue base of registrars in Nigeria.

“Before now, certificates were issued to investors as evidence of their investment in companies. This system is prone to delay in issuance and dispatch of certificates; (b) delays in verification of certificates; (c) risk of loss, theft and forgery of certificates.

“To address these issues, certificates are now to be issued in an electronic form domiciled directly with the CSCS. This improves customer experience, the velocity of trading, and the security of shareholding and turnaround timelines for settlement of trades. The NSE reports that about 73% of share certificates in the Nigerian capital market have been dematerialized. The target is 98 per cent,” she said.

Within this period, according to her, company deposits for dividends and related deposits have been drivers of up to 60 per cent of revenue for registrar businesses.

She added: “Accordingly, continued regulation pose a significant threat to revenue sources. Forward looking registrars like APR are not sitting idle but are redefining their business, reviewing models in response to this threat. Registrars must look for more opportunities, even beyond the capital market to provide other services. They must find the new Jobs to be done for clients that will generate revenues for today and the future. “

The Chairman AfriPrud, Eniola Fadayomi said: “As a company with a very strong passion for transforming the African continent through innovative solutions, superior investor relations, and business support services, Africa Prudential Plc is in business to maximise mutual possibilities for all its stakeholders.

“As a leading investor services firm with years of top-class experience in the Nigerian Capital Market, Africa Prudential Plc has made giant strides. The importance of this mission has never been in doubt.”