Tuesday, August 24, 2021 / 3:42 PM /
Ottoabasi Abasiekong for WebTV / Header Image Credit: WebTV
Collaboration between Registrars and Capital Market Operators is vital to reducing the high cases of Unclaimed Dividends in Nigeria.
The Managing Director/CEO of Africa Prudential Plc, Mr. Obong Idiong, made this point while providing views on addressing the tide of unclaimed dividends in Nigeria.
According to Idiong, a market-led approach would reduce the number of shareholders facing challenges in claiming their dividends.
He decried that only 2% of investor accounts in Nigeria have complete Know-Your-Customer (KYC) details, which means a lot is needed to resolve identity verification difficulties.
Idiong acknowledged that incomplete KYC is a significant catalyst for the rising tide of unclaimed dividends. He observed that capital market operators must come together to address the matter.
On the E-Dividend Mandate Management System, e-DMMS, he stressed the need for synergy between the platforms of registrars in the market and that of the Nigeria Inter-Bank Settlement Systems (NIBSS). He believed that this would help in improving the turnaround time in documenting e-dividend mandates for shareholders.
He highlighted one of the significant areas of concern, the 'Probates', which needs drastic automation. He believed that the process needs to become more accessible for investors to apply and complete dividend claims without hitches.
The CEO of Africa Prudential Plc noted that the Institute of Capital Market Registrars is already exploring the possibilities of increasing automation in its activities.
He disclosed that despite the COVID-19 outbreak in 2020, Africa Prudential Plc, as a boon from digitization, paid out N120bn dividends to investors in the capital market.
He provided clarifications on unclaimed dividends, which hit N170bn in 2020; he stated that SEC came out with a rule after 15 months. Registrars hold 10% of the total dividends paid, while the rest goes to the Issuing company.
Speaking on the SEC-led awareness and enlightenment campaigns in the market and across the country, he said it was a welcome development. Still, the infrastructure and systems need to be implemented to support an efficient way of carrying out dividend mandates.
He urged investors to provide all the required and complete information and ensure their accounts are mandated.
At the recent second quarterly meeting of the Capital Market Committee meeting for the year 2021, the Director-General of SEC, Mr Lamido Yuguda, attributed the rising figure of Unclaimed Dividend to identity management and multiple subscriptions investors.