The Ghana Stock Exchange (GSE) has begun working out procedures and modalities for the withdrawal of share certificates. When these guidelines are approved by the regulator of the capital market, Securities and Exchange Commission (SEC), the withdrawal will then take off.According to the Managing Director of GSE Kofi Yamoah, the whole process will be gradual and systematic, spanning over a period of one and half years.Withdrawal of the certificates had become necessary because of the Central Securities Depository (CSD) system to be implemented. The CSD bill already passed by Parliament is awaiting presidential assent. BusinessNews learned the bill will certainly obtain presidential assent before the end of the second quarter.The main focus of the bill is to provide for the establishment of a Central Securities Depository to regulate dealings in securities.The establishment of a Central Securities Depository is a vision embodied in the National Financial Sector Plan (FINSSP) as part of the Government's effort to develop a vibrant bond and secondary market in the country, and to ensure a prompt and efficient clearing and settlement system, which reduces the systemic risk inherent in the current system. It also provides for the holding of securities in immobilized or dematerialized form.The system in use currently poses challenges to both investors and issuers because it is costly to print certificates after initial public offers. Aside from that, certificates are cancelled and new ones issued every time securities are traded, leading to delays in clearing and settlement.At the moment, the first phase of the CSD is being implemented. This takes care of settlements and deposit of government securities. When finally passed into law, the CSD bill will permit for the second phase, which deals with corporate bonds and equities listed on the Ghanaian bourse. The existing laws allow only for the CSD to take care of government debt securities.The bill will deal with clearing and settlement services to facilitate buying, selling and otherwise dealing in securities and the operation of the depository service.It further seeks to provide for confidentiality and protection of information and documents relating to the affairs of persons holding securities accounts with the CSD.Given the presidential assent, the bill will establish an efficient system for the verification, inspection, identification and recording of all book entries of securities and registration and dealing in book entered securities.The CSD will enable the operation of securities accounts for handling book entry securities and cash; designate selected banks as settlement partners for settlement of funds in respect of transactions cleared through depository; guard against falsification of any records or accounts required to be kept or maintained under the act; and facilitate the deposit and withdrawal of certificates in respect of securities admitted in the CSD.Credit: BusinessNews