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How to move your account from broker to brokerPosted Monday, October 29, 2007
By Bosede Olusola-Obasa
Having a sense of satisfaction or being firmly in charge of your stocks investment is as important as what you realise from your investments.
If you have been getting a contrary feedback from your stockbroker or finding it difficult to manage him, you have an option to disengage his services and findings show that this is quite an easy process.
Investors do complain about their inability to get on well with their stockbrokers, but what many do not know, perhaps, is that there is a platform to formally switch from their point of dissatisfaction to satisfaction.
Whatever you do, ensure that you can at least vouch for the integrity of your stockbroker as this forms the bedrock of doing business at the stock market.
Recently, an aged female retiree narrated how she had been having difficulty selling a particular stock through her stockbroker.
Since she could not get any reasonable results using the telephone, she had to visit his office on one of the floors of the stock exchange building over every detail in spite of her ailing health.
This scenario is just one of the reasons an investor may want to switch over to another stockbroking firm.
The Chief Operating Officer, Centre Point Investments, Mr. Jire Oyewale, notes that some of the steps necessary for such a change include writing a formal letter that is signed and addressed to the Director-General of the Nigerian Stock Exchange.
The letter will indicate your decision to transfer your account from a resident (current) stockbroking house to a target (new) stockbroking house.
The current Central Securities and Clearing System statement and inter-member transfer form wherein the details of stocks, that is, name of stock and quantity is obtained.
The investor will fill his portion of the inter-member transfer form and sign on investor’s portion.
The form is then taken to the resident stockbroking house for signature and stamp of the managing director and accredited representative of the company.
A fee of N200 is paid to the resident stockbroking house at this point.
The managing director of the target stockbroking house as well as an accredited representative will also sign the inter-member transfer form and affix the company stamp.
When this is done, all the documents will be taken to the stock exchange for processing.
He, however, adds that for a moribund resident house, a letter of indemnity will be done by the target house to notify the exchange on any loss or problems that might arise as a result of the transfer in future.
“It should be noted that a moribund house would not have an accredited representative or/and a managing director. In the past, N100 and N200 are paid to CSCS and NSE respectively to complete the process, but now the payment is debited at the end of the year to the concerned house,” he adds.
While he says that the process for opening a special account with the exchange vide CSCS is distinct from transfer of stock from one stockbroking house to another, Mr. Bimbola Olaniyi, who is Chief Operating Officer, Yuderb Investments and Securities Limited, says opening such special accounts can be another way of operating almost independent of stockbroking houses.
He says, “The beauty of it is that if any house has problem, you are not affected because the stocks are in the custody of the CSCS. You have a choice to sell with any broker.”
He notes that one important point in transferring one’s account is that one cannot do a partial transfer, it has to be entire.
On the whole, investors need to be vigilant and interested in what their stockbrokers are doing to avoid falling into traps such as unauthorised sale of stockholdings, short-changing on sales or purchases made on behalf of their clients or being cajoled to buy ‘bad stocks’ already warehoused to be offloaded and so on.
The following are pieces of advice from an investment summit tagged ‘Wealth for the Wise Seminar’ held in the Ibadan in March:
One of the best parameters for judging good stockbrokers is to rely on referrals from satisfied or dissatisfied clients of such stockbrokers. You can get this from colleagues, friends and family members who do business with such stockbrokers.
Do not use your stockbroker’s address as your contact or collection point when filling a form to buy shares as you will be displaying over-confidence in the stockbroker.
Be informed about prevailing prices when buying or selling your shares.
You should keep records of your stock holdings so that no stockbroker can take undue advantage of your equities.
It is very useful and important to verify your signatures immediately you obtain your share certificates and demobilise them and lodge them in the CSCS depository.
You should insist on getting your CSCS stock position monthly from your stockbroker, as this forms the final authority on your holdings on the NSE. - Punch