How to Sell Your Shares If Your Broker Goes AWOL

Reader Tomi writes, “My mum wishes to sell shares of her Nigerian stock, but her broker seems to have disappeared. How can she go about getting her shares sold?”

Ugh. What a terrible feeling. Your stockbroker, the guys who are supposed to guide you through the stock investing process are no longer to be found.

Unfortunately, Tomi’s mum isn’t the only Nigeria investor to face this problem. In the wake of Nigeria’s financial crisis, the Nigerian Stock Exchange made an attempt to restore investor confidence by suspending 61 brokerage firms that failed to meet minimum capitalization requirements.  This resulted in lots of confusion for these brokers’ customers, leaving them with questions much like Tomi’s.

But don’t despair, Tomi. Your mum’s shares most likely haven’t disappeared, and as I’ve learned from the Nigerian brokers quoted below, there are a number of people who can assist you with tracking them down.

Find Your Share Certificate or CSCS Statement

“Thankfully, there are ways around a disappeared broker,” says Abdulmuttalib Garba of Dunn Loren Merrifield.

The first thing to do is to find out whether your mum has a share certificate. Until relatively recently, publicly-traded Nigerian companies issued certificates to investors whenever they purchased their shares. This certificate indicated the investor’s name and the number of shares purchased.

If Tomi’s mother still had a copy of this certificate in her possession, selling the shares would be a relatively simple matter. She would just open an account with another (hopefully more dependable) stockbroker and ask them to sell the shares. Because the Nigerian Stock Exchange no longer uses share certificates, the new broker will likely ask her to fill out some additional paperwork to de-materialize the old certificate and enter its information into the exchange’s electronic clearinghouse, the Central Securities Clearing System (CSCS).

If a share certificate is lost or was never issued, the next piece of information to look for is a CSCS statement. This statement shows all the shares owned by an investor. If she has this, all Tomi’s mum needs to do is present the statement when opening a new brokerage account and they will be able to sell her shares.

Photo by Gary Simmons
Photo by Gary Simmons
No Documentation? Try the Company Share Registrar

But what happens if you’ve lost your share certificate and the CSCS doesn’t have record of you?

“In Nigeria,” says John Agbo, Managing Director of Standard Alliance Capital and Asset Management, “you need to provide a sworn affidavit to the company registrar.”

The registrar’s role is to keep track of all the company’s share movement, no matter whether those shares have been dematerialized or not. Because the CSCS only monitors shares that have already been dematerialized, says Bukola Oluwadiya, Managing Director of Magnartis Finance and Investment, the registrar is your best bet when shares have been lost.

“Your particulars will be taken along with a signature sample. The registrar will then investigate the claim and issue a new share certificate if they determine the claim is valid,” says Agbo.

The biggest worry would be that the broker sold the shares without Tomi’s mum’s permission to do so. Even if this were to be the case, Garba says the CSCS could still access the shares for her because it mirrors all of her share-trading activity.

No matter what the circumstances, tracking down the shares can involve significant paperwork, says Oluwadiya. Investors can authorize a broker or agent to track down the shares on their behalf for a fee.

What Did I Miss?

Have you ever lost track of your broker? Or lost a share certificate? How did you resolve the situation? Let us know in the comments!

Related Reading

How to Invest on the Nigerian Stock Exchange

 

How to Invest in Zambia

Understated Zambia is quietly putting together one of the world’s most impressive records of economic growth. The Southern Arican nation’s GDP has grown in excess of 5.3% every year since 2003, and the IMF forecasts its economy will expand by 7.7% this year thanks to strong demand for its primary export — copper.

Zambian stocks have reflected this vibrant growth. The Lusaka Stock Exchange is Africa’s best performer over the past three years. Its main index surged 89.6% (US dollar terms) since March 2009.

So, how can global investors participate in this intriguing market?

Here’s a quick guide to opening a Zambian trading account and buying your first shares.

Zambian Stockbrokers

I emailed each of the six brokers who are licensed to trade on the Lusaka Stock Exchange. I asked them if they catered to foreign investors, how much they required to open an account, and what documentation was necessary. I found the two brokers listed below to be particularly helpful and responsive.

Broker Minimum Initial Deposit Account Opening Form Research Sample
African Alliance Zambia No minimum required Not Available Online Not Available Online
Stockbrokers Zambia ZMK256,000 (roughly $50.00) Here Not Available Online

Trading Costs

Commissions and fees amount to 1.375% of the total transaction value. This rate is standard across all brokers.

Photo by CIMMYT

Opening a Zambian Brokerage Account

Now let’s walk through the process of opening an account with a Zambian stockbroker and buying your first shares.

Step 1: Complete the Broker’s Account Opening Form

After emailing a broker and requesting information on how to open an account, they will send you a blank account opening form. A sample form from Stockbrokers Zambia may be found in the above table. The form typically requires disclosure of your passport number or other ID number and your address.

If you would like to have dividends deposited directly into your trading account (and I recommend that you do), you should inform your broker of this at this time.

Step 2: Collect a Photocopy of Your Passport.

If you don’t have a valid passport, a copy of your driver’s license may suffice.

Step 3. Mail the Original Account Opening Form and Photocopy of Your Passport to Your Broker

You may email photocopies of all documents to your broker to get a head start on the account opening process, but they must eventually receive the original documentation. I recommend using a courier for this. It’s pricey but could save you a lot of grief in the event that the post office loses track of your documents.

Step 4. Wire Funds to Your Brokerage Account

After opening your trading account, your broker will provide you with its bank details so that you can fund your account. The most efficient way to do this is via wire transfer. If you haven’t sent an international wire before, I suggest that you take your broker’s bank details to your local bank branch and ask them to walk you through the process. They’ll make sure that your funds arrive securely. Note that most US banks charge about $25 for outgoing international wires.

Step 5. Submit a Trade Order

You’ve done your research and found a stock that you’d like to buy. What now?

All that needs be done is to submit a written trade instruction. Some brokers may have a special trade mandate form to complete, but, for others, a simple email may suffice.

Keep in mind that many shares listed on the Lusaka Stock Exchange are rather illiquid, so I advise specifying a limit price for all of your orders. This will help you avoid paying significantly more for your shares than you had intended to pay.

Your broker will then execute your trade and send you a contract note that specifies the buy or sell price, commissions, and fees. Settlement of share trades takes up to three business days after the trade date in Zambia, so if you’ve sold shares, don’t expect to receive the proceeds of a sale before then unless you’re willing to incur a penalty to settle the trade more quickly.

Mission Accomplished

Follow these steps and you’re all set to begin investing in Zambian stocks. That wasn’t too bad, was it?

The process of opening a foreign brokerage account can be confusing. If you found this walk-thru to be clear as mud, please don’t be shy. Post your questions in the comments, and I’ll do my best to get answers for them.

Further Reading

How to Invest on the Botswana Stock Exchange

How to Invest on the Ghana Stock Exchange

How to Invest on the Nigerian Stock Exchange

How to Invest on the Zimbabwean Stock Exchange

 

How to Invest on the Rwanda Stock Exchange

Less than 20 years ago, the world watched as a paroxysm of genocidal violence wracked Central Africa’s land of a thousand hills. If ever there was a place bereft of hope, Rwanda was it.

Yet, to the world’s astonishment, the country refused to settle for merely rebuilding. Instead, it opted to transform. Rwanda’s economy has expanded at a 7.8% pace for the past ten years, and neighbor is slowly, cautiously learning to live with neighbor once more.

Now, investors from both near and far have an opportunity to support Rwanda’s improbable economic success. The nascent Rwanda Stock Exchange (RSE) is open for business.

Here’s a quick guide to opening a Rwandan trading account and buying your first shares.

Rwandan Stockbrokers

I emailed each of the ten brokers who are licensed to trade on the RSE. I asked them if they catered to foreign investors, how much they required to open an account, and what documentation was necessary. I found the three brokers listed below to be particularly helpful and responsive.

Broker Minimum Initial Deposit Account Opening Form Research Sample
African Alliance Rwanda No minimum required Not Available Online Not Available Online
CDH Capital No minimum required Here Not Available Online
Faida Securities Rwanda No minimum required Not Available Online Not Available Online

Trading Costs

Commissions and fees amount to 1.71% of the total transaction value. This rate is standard across all brokers.

Note that the exchange requires that trades be for a minimum of 100 shares.

Opening a Rwandan Brokerage Account

Now let’s walk through the process of opening an account with a Rwandan stockbroker and buying your first shares.

Photo by Dylan Walters

Step 1: Complete the CSD Account Opening Form

The Central Securities Depository (CSD) records the ownership of Rwandan securities via electronic accounts. When you ask a broker to open a trading account, they will send you a copy of the CSD Account Opening Form. After completing and returning it to your broker, you will be assigned a CSD account number. This number will accompany every Rwandan stock trade you execute, allowing the CSD to keep record of all your holdings in the country.

Step 2: Complete the Broker’s Account Opening Form

After your first email to the broker requesting information on how to open an account, they may also send you a blank account opening form, which is sometimes referred to as the “Know Your Client” or KYC form. A sample form from CDH Capital may be found in the above table. The form typically requires disclosure of your passport number or other ID number, your address, and a signature sample.

Step 3: Collect two photocopies of your passport and two passport-size photos.

Step 4. Mail the original CSD form, account opening form, passport photos, and photocopies of your passport to your broker

You may email photocopies of all documents to your broker to get a head start on the account opening process, but they must eventually receive the original documentation. I recommend using a courier for this. It’s pricey but could save you a lot of grief in the event that the post office loses track of your documents.

Step 5. Wire Funds to Your Brokerage Account

After opening your trading account, your broker will provide you with its bank details so that you can fund your account. The most efficient way to do this is via wire transfer. If you haven’t sent an international wire before, I suggest that you take your broker’s bank details to your local bank branch and ask them to walk you through the process. They’ll make sure that your funds arrive securely. Note that most US banks charge about $25 for outgoing international wires.

Step 6. Submit a Trade Order

You’ve done your research and found a stock that you’d like to buy. What now?

All that needs be done is to submit a written trade instruction. Some brokers may have a special trade mandate form to complete, but, for others, a simple email may suffice.

Keep in mind that many shares listed on the Rwanda Stock Exchange are rather illiquid, so I advise specifying a limit price for all of your orders. This will help you avoid paying significantly more for your shares than you had intended to pay.

Your broker will then execute your trade and send you a contract note that specifies the buy or sell price, commissions, and fees. Settlement of share trades takes up to three business days in Rwanda, so if you’ve sold shares, don’t expect to receive the proceeds of a sale before then unless you’re willing to incur a penalty to settle the trade more quickly.

An Important Note on Dividends

None of the Rwandan brokers that responded to me (except CDH Rwanda) would deposit dividends directly into a client’s brokerage account. You must instead opt to receive a dividend check denominated in Rwandan Francs or open a Rwandan bank account to collect the dividends. Because the teller at your local Wells Fargo branch will probably laugh in your face if you ever try to cash a Rwandan check there, your best option, unfortunately, is to open a Rwandan bank account.

Your broker should be able to assist you in connecting with a reputable bank and to help facilitate the account opening process. The CSD will be informed of your local bank details and will route all of your dividends there.

Mission Accomplished

Follow these steps and you’re all set to begin investing in Rwandan stocks. That wasn’t too bad, was it?

The process of opening a foreign brokerage account can be confusing. If you found this walk-thru to be clear as mud, please don’t be shy. Post your questions in the comments, and I’ll do my best to get answers for them.

Further Reading

How to Invest on the Botswana Stock Exchange

How to Invest on the Ghana Stock Exchange

How to Invest on the Nigerian Stock Exchange

How to Invest on the Zimbabwean Stock Exchange

 

How to Invest on the Dar es Salaam Stock Exchange

If you really want to invest at the furthest reaches of Africa’s frontier markets, the Dar es Salaam Stock Exchange (DSE) is for you. The little market lists only 11 local companies and trade volumes often don’t exceed $500,000 per week.

Part of the reason for this is because the Tanzanian government does not allow foreigners to purchase shares of companies whose foreign ownership percentage exceeds 60%. As of this date, only six stocks have foreign ownership percentages less than 60%.

Even so, the DSE will likely not be so sleepy five years from now. Exploration companies have discovered huge natural gas reserves off Tanzania’s sandy shores that they are rushing into production. Now the country appears set to be the world’s newest energy hub.

One way to get in on the ground floor of these exciting developments is via the stock market. Let’s take a look at what it takes to open a Tanzanian brokerage account.

Tanzanian Stockbrokers

I emailed each of the ten brokers who are licensed to trade on the DSE. I asked them if they catered to foreign investors, how much they required to open an account, and what documentation was necessary. I found the two brokers listed below to be particularly helpful and responsive.

Broker Minimum Initial Deposit Account Opening Form Research Sample
Orbit Securities No minimum required Not Available Online Not Available Online
Vertex Securities No minimum required Here Not Available Online

Trading Costs

Commissions and fees are assessed on a sliding scale that is standard across all brokers. For transaction amounts less than TZS10,000,000 (roughly $6,300) you will pay 2.0% of the total trade value when buying or selling a stock. For amounts less than TZS50,000,000 (about $31,600) the total commission is 1.8%. Anything greater than that is charged 1.1%.

Opening a Tanzanian Brokerage Account

Now let’s walk through the process of opening an account with a Tanzanian stockbroker and buying your first shares.

Dar es Salaam
Photo by Siddharth Pendharkar

Step 1: Complete the CDS Account Opening Form

The Central Depository System (CDS) records the ownership of Tanzanian securities via electronic accounts. When you ask a broker to open a trading account, they will send you a copy of the CDS Account Opening Form. After completing and returning it to your broker, you will be assigned a CDS account number. This number will accompany every Tanzanian stock trade you execute, allowing the CDS to keep record of all your holdings in the country.

Step 2: Complete the Broker’s Account Opening Form

After your first email to the broker requesting information on how to open an account, they may also send you a blank account opening form, which is sometimes referred to as the “Know Your Client” or KYC form. A sample form from a Vertex Securities may be found in the above table. The form typically requires disclosure of your passport number or other ID number, your address, and asks for your preference regarding collection of dividends and payment of fees.

Step 3: Photocopy your passport

If you don’t have a valid passport, a driver’s license may suffice.

Step 4. Mail the original CDS form, account opening form, and copy of your passport to your broker

You may email photocopies of all documents to your broker to get a head start on the account opening process, but they must eventually receive the original documentation.

Step 5. Wire Funds to Your Brokerage Account

After opening your trading account, your broker will provide you with its bank details so that you can fund your account. The most efficient way to do this is via wire transfer. If you haven’t sent an international wire before, I suggest that you take your broker’s bank details to your local bank branch and ask them to walk you through the process. They’ll make sure that your funds arrive securely. Note that most US banks charge about $25 for outgoing international wires.

Step 6. Submit a Trade Order

You’ve done your research and found a stock that you’d like to buy. What now?

While some brokers will request a signed trade mandate form, for most brokers, all you need to do is send an email to your broker with your trade instructions. Keep in mind that many shares listed on the Dar es Salaam Stock Exchange are rather illiquid, so I advise specifying a limit price for all of your orders. This will help you avoid paying significantly more for your shares than you had intended to pay.

Your broker will then execute your trade and send you a contract note that specifies the buy or sell price, commissions, and fees. Settlement of share trades takes up to six business days in Tanzania, so if you’ve sold shares, don’t expect to receive the proceeds of a sale before then unless you’re willing to incur a penalty to settle the trade more quickly.

An Important Note on Dividends

It is not possible to have stock dividends deposited directly into a Tanzanian brokerage account. You must instead opt to receive a Tanzanian Shilling denominated dividend check or open a Tanzanian bank account to collect the dividends. Because the teller at your local Wells Fargo branch will probably laugh in your face if you ever try to cash a Tanzanian Shilling denominated check there, your best option, unfortunately, is to open a Tanzanian bank account.

Your broker should be able to assist you in connecting with a reputable bank and to help facilitate the account opening process. The CDS will be informed of your local bank details and will route all of your dividends there.

Mission Accomplished

Follow these steps and you’re all set to begin investing in Tanzanian stocks. That wasn’t too bad, was it?

The process of opening a foreign brokerage account can be confusing. If you found this walk-thru to be clear as mud, please don’t be shy. Post your questions in the comments, and I’ll do my best to get answers for them.

Further Reading

How to Invest on the Botswana Stock Exchange

How to Invest on the Ghana Stock Exchange

How to Invest on the Nigerian Stock Exchange

How to Invest on the Zimbabwean Stock Exchange

 

How to Invest on the Nigerian Stock Exchange

The Nigerian Stock Exchange hasn’t exactly sizzled of late. A domestic banking crisis and political turmoil slashed the MSCI Nigeria Index 60% from its record 2008 highs.

But the potential of Africa’s most populous nation is enormous. A 60% drop tells me that it’s an opportune time to scour sub-Saharan Africa’s second largest stock market for bargains.

But first things first. I need a Nigerian brokerage account. So, how exactly do I go about opening one? Let’s take a look-see.

Nigerian Stockbrokers

In all previous posts in this “How to Invest” series, I have made an attempt to contact every single stockbroker registered as a dealing member of each respective exchange. I must confess that I didn’t succeed in doing that for this article. Why not? Because there are 327 brokers licensed to trade on the Nigerian Stock Exchange.

I narrowed this list down by visiting each of their websites. Any websites that seemed out of date or less than professional looking, didn’t make the shortlist. I admit this was a totally subjective process that may have excluded some fine brokers, but I needed to start somewhere.

Photo by S. Remeika

I then emailed all brokers that survived my initial website evaluation – a few dozen in all. I asked each broker if they catered to foreign investors, how much they required to open an account, and what documentation was necessary. I found nine brokers with reasonable account minimums to be particularly helpful and responsive. Each broker below responded to my initial query within one business day.

Broker Minimum Initial Deposit Account Opening Form Research Sample
ARM Securities N100,000 (approx. $635.00) Here Here
BGL Securities N100,000 (approx. $315.00) Here No Recent Online Research
CardinalStone N1,000,000 (approx. $6,350.00) Here Here
Chapel Hill Denham None Here Here
Cowry Securities N500,000 (approx. $3,150.00) Here Here
Lead Capital N50,000 (approx. $315.00) Here No Recent Online Research
Meristem N2,500,000 (approx. $15,850.00) Here Here
UBA Stockbrokers N250,000 (approx. $1,585.00) Not Available Online No Recent Online Research
Zenith Securities N250,000 (approx. $1,585.00) Here No Recent Online Research

Trading Costs

Commissions and fees are assessed on a sliding scale that is standard across all brokers. For transaction amounts less than N1,000,000 (roughly $6,350.00) you will pay 1.86% when purchasing a stock and 2.19% when selling one. For larger transactions, commissions and fees total 1.49% of the total transaction value to buy and 1.82% of the total transaction value to sell.

Opening a Nigerian Brokerage Account

Now let’s walk through the process of opening an account with a Nigerian stockbroker and buying your first shares.

Step 1: Complete the CSCS Account Opening Form

The Central Securities Clearing System (CSCS) records the ownership of Nigerian securities via electronic accounts. When you ask a broker to open a trading account, they will send you a copy of the CSCS Account Opening Form (sample from ARM Securities here). You will then be assigned a CSCS account number. This number will accompany every Nigerian stock trade you execute, allowing the CSCS to keep record of all your holdings in the country.

Step 2: Complete the Broker’s Account Opening Form

After your first email to the broker requesting information on how to open an account, they will also send you a blank account opening form. Sample forms from each broker may be found in the above table. The form typically requires disclosure of your passport number or other ID number, your address, and banking details.

Step 3: Collect two color passport-sized photos of yourself

You might as well get a bunch of them while you’re at it. They always seem to come in handy.

Step 4: Photocopy your passport

If you don’t have a valid passport, a copy of your driver’s license may suffice.

Step 5. Photocopy a recent utility bill that can be used to verify your place of residence

Most brokers require a water or electricity bill dated within the most recent three months.

Step 6. Send the original CSCS form, account opening form, passport photos, copy of your ID, and copy of your utility bill to your broker via DHL or FedEx

You may email photocopies of all documents to your broker to get a head start on the account opening process, but they must eventually receive the original documentation. And do yourself a favor by sending it via a courier like DHL or FedEx. Couriers are expensive, but they’re more reliable than the postal service. I’ve learned that the hard way.

Step 7. Wire Funds to Your Brokerage Account

After opening your trading account, your broker will provide you with its bank details so that you can fund your account. The most efficient way to do this is via wire transfer. If you haven’t sent an international wire before, I suggest that you take your broker’s bank details to your local bank branch and ask them to walk you through the process. They’ll make sure that your funds arrive securely. Note that most US banks charge about $25 for outgoing international wires.

Step 8. Submit a Trade Order

You’ve done your research and found a stock that you’d like to buy. What now?

While some brokers will request a signed trade mandate form, for most brokers, all you need to do is send an email to your broker with your trade instructions. Keep in mind that some shares on the Nigerian Stock Exchange are rather illiquid, so I advise specifying a limit price for all of your orders. This will help you avoid paying significantly more for your shares than you had intended to pay.

Your broker will then execute your trade and send you a contract note that specifies the buy or sell price, commissions, and fees. Settlement of share trades takes four business days on the Nigerian Stock Exchange, so if you’ve sold shares, don’t expect to receive the proceeds of a sale before then unless you’re willing to incur a penalty to settle the trade more quickly.

A Note on Dividends

Collecting dividends from Nigerian stocks is relatively painless. Upon opening your account, simply instruct your broker (in writing) that you would like all dividends paid on your holdings to be deposited directly into your trading account.

Mission Accomplished

That’s it! Follow these steps and you’re all set to begin investing in Nigerian stocks.

The process of opening a foreign brokerage account can be confusing. If you found this walk-thru to be clear as mud, please don’t be shy. Post your questions in the comments, and I’ll do my best to get answers for them.

Further Reading

How to Invest on the Botswana Stock Exchange
- How to Invest on the Ghana Stock Exchange
- How to Invest on the Ivory Coast’s BRVM
- How to Invest on the Uganda Securities Exchange
- How to Invest on the Zimbabwean Stock Exchange
- How to Invest on the Nairobi Stock Exchange

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