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MSE to phase out physical certificates

The Malawi Stock Exchange (MSE) has said it plans to phase out phys ica l share certificates through its dematerialisation process.

MSE Operations Manager, Esnart Chilije, said the development is part of the local bourse’s automation initiative.

Traditionally, shareholders were given physical share certificates as proof of ownership of shares in listed entities.

But speaking on Monday, Chilije said the dematerialisation process would bring more benefits to shareholders.

Among other things, Chilije said incidences of losing share certificates will be a thing of the past.

She said the dematerilaisation process would help reduce incidences of fraud involving share certificates.

Electronic trading, according to Chilije, is expected to commence by end of May 2018 and that only securities that have been transferred and registered in the Central Securities Depository (CSD) will be traded in the Automated Trading System (ATS).

“The CSD is commencing the dematerialisation process of the existing paper certificates and therefore requires that shareholders open investor accounts and dematerialise their securities in preparation for the trading of electronic based securities following implementation of the systems.

“Current shareholders are consequently required to contact a registered stock broker or custodian to dematerialise their stock holdings. Stock holders will be required to complete a Stock Holding Declaration and Consent to Dematerialise form upon presentation of the physical certificates; a signed and stamped copy of the form will be provided to the holder,” Chilije said.

She added that the dematerialisation process will run from April 30, 2018 to September 30, 2018.

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