d

Procedure for Inter member Transfer of Account

Inter member transfer affords the investors freedom of action. They are allowed to transfer their stock account from the resident Stockbroking firm to another Stockbroking firm of their choice (Target Stockbroking firm). By this method, investors are not compelled to remain with a particular Stockbroking firm.


If Transfer is initiated by the Resident Stockbroking (Current) Firm

  1. The Stockbroking firm is required to write to The Nigerian Stock Exchange to move the client’s account (based on the client’s request) to another Stockbroking firm. This letter would be addressed to The Director-General of The Nigerian Stock Exchange.
  2. The Inter member transfer Form is expected to be completed, stating the Stocks and quantities, duly signed by the three parties (the resident Stockbroking firm, the target Stockbroking firm and the Investor)
  3. Confirmation of the transfer from CSCS can be obtained through the acknowledgement copy of the transfer letter or the CSCS updated website.
  4. The Target Stockbroking firm can then proceed to manage the account.


If Transfer is initiated by the Target Stockbroking Firm

  1. The new Stockbroking firm is required to write a letter to The Nigerian Stock Exchange (addressed to The Director-General) with client’s letter of instruction to the Stockbroking firm attached, stating his/her intentions to transfer his/her account from the former Stockbroking firm to the new one.
  2. The Inter member transfer Form is expected to be completed, stating the Stocks and quantities, duly signed by the three parties (the resident Stockbroking firm, the target Stockbroking firm and the Investor)
  3. Confirmation of the transfer from CSCS can be obtained through the acknowledgement copy of the transfer letter or the CSCS updated website.
  4. The Target Stockbroking firm can then proceed to manage the account.


Some common mistakes associated with Inter member transfers

  1. Some stockbroking firms initiate transfer requests without ascertaining the availability of the stocks in the investor’s account. This can be avoided by demanding for the current stock position from the investor in order to reduce faulty transfer requests.
  2. Most often, there are open-ended transfer request such as “transfer all the stocks belonging to Mr. A”. Requests in this nature cannot be treated because the stock name and quantity to be moved must be explicitly stated.
  3. Some shareholders instruct CSCS directly to transfer their stocks to another Stockbroking firm. Such requests are expected to go to The Nigerian Stock Exchange with the Inter member transfer Forms duly signed by the three parties (the resident Stockbroking firm, the target Stockbroking firm and the Investor)
  4. Sometimes, requests are made to the stock account of the Stockbroking firm instead of the stock account of the investor in the Target Stockbroking firm. This is unacceptable because it amounts to change of ownership without trades. Therefore, stocks must be from Investor’s account with the Resident Stockbroking firm to the investor’s account with the Target Stockbroking firm.