AN IPO REGISTRARS EXPERIENCE

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AN IPO REGISTRARS EXPERIENCE

• PRESENTED
• TO
• THE PARTICIPANTS OF THE NAIROBI STOCK EXCHANGE
  WORKSHOP ON INITIAL PUBLIC OFFERS ON FRIDAY,
  FEBRUARY 9, 2007
• BYKIPNGETICH ARAP KORIR BETT

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STRUCTURE OF PRESENTATION

• Introduction- Image Registrars, Certified Public
  Secretaries
• The Teams Experiences
• Duties of Registrars
• Role of Registrars in an IPO
• Segregation of duties of Registrars vis a vis
  Receiving Bank
• The IPO process flow
• Post IPO issues
• Past Experiences Lessons Learnt
• Q A

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2.THE TEAMS EXPERIENCE
ICDCI
Over 40 private companies e.g CSC,TNB
The Standard Newspapers Group Ltd
KenGen
Tourism Promotion Services Eastern Africa Ltd
Mumias Sugar Company
Eveready
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STATISTICS
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3. DUTIES OF REGISTRARS

• Maintain the register of members i.e., change of
  shareholder details, verification and transfer of
  shares issuance of certificates
• Manage corporate actions - dividend payments,
  rights bonus issues, share swap, share split,
  AGMs, AGM polls
• Manage and drive IPO processes
• Interact with shareholders, and other
  stakeholders regulatory bodies such as the NSE,
  CDSC,CMA, the Registrar of Companies and KRA
• Assist in Company Secretarial duties.

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4. ROLE OF THE REGISTRAR IN AN IPO

• Contribution to prospectus/I.M, agents manual,
  application form, share certificate, refund
  cheque/allocation notification design
• Training of agents on the IPO process
• Acts as receiving agent for all applications,
  reviews all applications for errors and interacts
  with agents to obtain additional information
  where needed
• Provides batching procedures to agents
• Performs data entry and validation
• Provides reports on progress of offer during the
  offer period to the transaction team
• Aggregation of multiple applications

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THE ROLE OF THE REGISTRAR IN AN IPO (contd)

• Performs allotment based on the agreed allotment
  criteria
• Reconciles with the receiving bank and generates
  refund list (to facilitate refunds in case of
  over subscription)
• Generates upload file for direct credit of
  allotted shares into CDS
• Prints and dispatches certificates to
  shareholders who had requested for certificates
• Files necessary returns with the regulatory bodies

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5. SEGREGATION OF DUTIES - REGISTRARS Vs
RECEIVING BANK

• Registrar
• Daily processing validation of applications
• Send rejections to selling agents
• Prepare global application statistics
• Prepare list of applicants
• Perform allotment
• Provision of statistics for Announcement of final
  results
• Release of refund details
• Electronic file to CDSC for direct crediting to
  respective accounts
• Allocation letters and share certificates
• Issuance of clearance certificates to selling
  agents

• Receiving Bank
• Payment of refunds to investors
• Payment of commissions to selling agents
• IPO account monitoring and reconciliation
• Payment of levies to CMA, DSC and NSE
• Payment of IPO proceeds net of costs to vendors
• Daily reporting to vendor on IPO account status

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6. THE IPO FLOW
Distribution unit
Receiving Unit
Reception
DATA ENTRY 1
DATA ENTRY 2
Validation unit
Scanning filing
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6. THE IPO FLOW(2)
Registrars (Applications, cheques processed)
Aggregate multiples
CDS Deposits
ALLOTMENT
De-aggregate
Share Certs
Agent Comm.
Refunds
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7. CHALLENGES IN AN IPO

• Incorrectly filled application forms
• Late submission of applications
• Conflict of roles of receiving bank and registrar
• Constricting timelines
• Validation of CDS account numbers in conjunction
  with the CDSC
• Unprecedented volumes
• Last-minute rush processing

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8. POST IPO ISSUES

• Applicant queries on allotments and refunds
• CDS reconciliation of deposited accounts
• Reconciliation with agents to facilitate payment
  of agent commissions
• Maintenance of the shares register and
  immobilization of certificated shares
• Management of paperwork

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9. PAST EXPERIENCES LESSONS LEARNT

• Need for better training of all participating
  agents
• Need for an all inclusive timetable with
  realistic and flexible timelines
• Need for a properly structured application form
  that is easy to understand and fill out
• Need for extensive investor awareness
• Registrars to work closely with CDS for
  validation of data
• Need for separation of role of receiving bank and
  that of registrar

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Q A