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SEC To Robustly Tackle The Problem of Unclaimed Dividends In 2020

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Thursday, December 26, 2019 / 08.45PM / SEC Nigeria / Header Image Credit: SME Digest

The Securities and Exchange Commission (SEC) has said that it has outlined a number of initiatives in a bid to resolve the issue of unclaimed dividends in the capital market.

Acting Director General of the SEC, Ms. Mary Uduk, who spoke in Abuja, said in the new year, the Commission would employ various strategies in a bid to ensure that issues of unclaimed dividends are effectively tackled.

Uduk said the issue of unclaimed dividends are legacy issues as they happened way back in the past adding that right now the major problem has to do with identity management which the capital market and other stakeholders are working to resolve.

She said, "Right now you will not get unclaimed dividends from new issues. Part of the problem of unclaimed dividend has to do with identity management which we are doing all we can to educate the public and engage various stakeholders to obtain needed information."

"financial footprints like BVN have been added to registration and documentation requirements to help in identity management. The Central Securities Clearing System (CSCS) and the registrars are working together to ensure that more information from legacy shareholders are collected to update their dividend data base."

Uduk said of recent, there have been more engagements with shareholders on the issue to ensure resolution.

"The registrars don't have direct interface with shareholders, they deal directly with stockbrokers. But there is a committee comprising of the SEC, the registrars, the stockbrokers, the issuing houses, the CSCS and NSE working on that in addition to the e-dividend management committee. The committee has come up with a resolution which was adopted at the last Capital Market Committee (CMC) meeting. Part of the resolutions was that stock brokers will update information in respect of their clients.

"Before 2008, we had a lot of Nigerians who bought shares in the capital market and at that time we did not have BVN numbers. Even some of them did not provide their account numbers. What was agreed was that we would update information of such shareholders. That information will be transmitted to the CSCS who will update their own information and send them to the registrars.

The Acting DG stated that it was also agreed that there will be no transaction in respect of any account that information is not updated and on the part of capital market operators they will be given a time frame within which to resolve such issues.

Uduk also disclosed that the Commission has approved the rule in respect of electronic offering which by the time it commences will address problems associated with unclaimed dividends.

"We believe that by the time we commence that, it will address the issue of unclaimed dividend. Before you can complete the application, the system will validate your account number, the system will not accept incomplete application. We believe that in addition to the e-dividend mandate, these other initiatives that the Commission is doing with other stakeholders will address the issue of unclaimed dividends" she affirmed.