Reduces Unclaimed Dividend By N30b
The Securities and Exchange Commission (SEC), on Monday, said it extended the period for bearing the cost of the ongoing electronic-Dividend enrolment till June 30, 2017, when it plans phase out the issuance of dividend warrants in the Nigerian capital market.
Extension of the deadline, the commission noted, is a means to further reduce the unclaimed dividends profile and curb its growth in the country.
The statement explained that the SEC in its bid to ensure that “all investors benefit from the E-Dividend programme free of charge, the SEC had committed to pay the cost of enrolment throughout the year 2016, and had resulted in getting about 48% of investors to enroll for the e-dividend payments. Arising from this exercise, over N30 Billion which was hitherto unclaimed have so far been credited to respective Bank Accounts of Investors.
Therefore, the advantage of the e-dividend, the statement noted, is not only to enable investors collect subsequent dividends electronically but it allows all accrued dividends be credited to investors’ Bank Accounts.
“The Commission has however observed with concern the challenges being experienced by investors in the course of the e-Dividend registration and therefore commits to further defray the cost of registration till June 30th, 2017 to enable investors continue to enjoy the free registration” the SEC stated.
The SEC reminded the investing public that at the expiration of the free registration period, Dividend warrants will no longer be issued as it would be replaced with electronic dividend payments.
This decision, the commission added, underscores the strong focus on market development and enhancement of investor confidence. All investors in the Nigerian Capital Market are therefore advised to take advantage of this extended grace period by approaching their Bankers or Registrars for enrolment before the deadline.
E-dividend payment platform was introduced to address the rising incidence of unclaimed dividends in the Nigerian capital market.
It is also expected to address the lingering problem of unclaimed dividends, which the market had sought solution for the past 20 years.
SEC DG, Mounir Gwarzo had recently said that efforts made by the commission to ensure that the era of stale dividends and huge unclaimed dividends in the market become a thing of the past was already achieving result with the e-dividend registration system.
“When we started the e dividend, the major challenge was for people to key into the e dividend mandate. There are unclaimed dividends that have not been claimed, the registrars have been compelled to pay all the arrears of unclaimed dividends.
“In this country, we have never had this kind of initiative that has reduced unclaimed dividends like we had today. Apart from the investor getting his dividends where ever he is, that investor will be able to get dividends that in the last five years he has not been able to get. The e-dividend is for the interest of retail investors” he added.