The Securities and Exchange Commission (SEC) says significant progress has been made in the road to reducing the volume of unclaimed dividend in the books of registrars, particularly of companies quoted on the Nigerian Stock Exchange (NSE).
Speaking during an interactive session with capital market journalists on the third and last Capital Market Committee Meeting (CMC) for the year and the performance of the market in the past three months, Mounir Gwarzo, Director General of SEC said company registrars in the nation’s capital market have paid over N29.274 billion in unclaimed dividend to investors that had not been able to do so between November and now.
He explained that the electronic dividend platform has recorded a lot of positive changes as against what it was before now.
Gwarzo explained that the commission achieved this through the advocacy efforts of all stakeholders in the market across the country.
This, he said, “is the best the industry has done”, and commended the contributions of the banking sector and the registrars in ensuring the success of the platform.
He assured that the e-dividend platform is for the good of retail investors and the industry operators in general, assuring that the commission is poised to end the story of unclaimed dividend in the capital market.
The DG added that incentives and time extension that was put in place to encourage investors in embracing the e-dividend scheme will continue until the market achieved 100 percent e-dividend transition. He emphasized that by end of June 30, 2017, registrars of companies will stop issuing physical dividend warrants to shareholders.
However, on the circular concerning the establishment of Nigerian Capital Market Development Fund (NCMDF) which will take care of all unclaimed dividends that is above 12 years. Gwarzo noted that a committee has been set up to work out its modalities for the trust fund, adding that without pre-empting the committee which are reviewing the Investments and Securities Act (ISA) and the Companies and Allied Matters Acts (CAMA), they will decide if it’s appropriate to allow investors to forfeit their dividend once its above 12 years or leave it to perpetuity.
The apex regulator in the capital market last year july formally launched the e-Dividend Mandate Management System (e-DMMS) in conjunction with the Central Bank of Nigeria (CBN) and all Deposit Money Bank to address the issue of unclaimed dividend in the capital market. According to Samuel Oluyemi Head, Vertical Markets Group from the Nigerian Inter Bank Settlement System (NIBSS), the e-DMMS portal utilizes NIBSS’s robust document management system to which the e-dividend mandate forms filled by the investor can be uploaded,” it explained, adding that the e-dividend form could be obtained and properly filled at bank branches or in the office of a registrar and stock broking firms.
On demutualization of share certificate, he said they have achived 98.9 percent success and about less than three percent of the certificates have not been demutualized.
The SEC DG however said his optimistic that the next three months they will be looking at 100 percent success of demutualization of share certificates in the country.