N80b Unclaimed Dividends: SEC, CBN, NIBSS To Tackle Menace | Independent Newspapers Limited
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N80b Unclaimed Dividends: SEC, CBN, NIBSS To Tackle Menace

Posted: Jul 30, 2015 at 1:53 am   /   by   /   comments (0)

•  Unveil e-Portal

By Bamidele Ogunwusi and Gloria Ishaleku


After almost two decades of dilly-dallying, the Securities and Exchange Commission (SEC) on Wednesday said it found an antidote to the unclaimed dividends menace which has risen steadily to between N75 and N80 billion.

The solution, the commission said, is the electronic-dividend payment platform initiated in collaboration with the Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System (NIBSS).

Speaking at the unveiling of the platform in Lagos, Director-General of the SEC, Mounir Gwarzo, said market stakeholders have waited for it over the past 20 years, assuring that “the era of stale dividend and huge unclaimed dividend in the market will be a thing of the past with the launch of e-dividend payment platform.”

He said the commission was determined to see the full implementation of the e-dividend payment system and would embark on massive public enlightenment on how investors would utilise the portal.

The SEC boss assured that the commission would also conduct intensive training for bankers and registrars on its use, just as he said investors have nothing to fear about the bearish trend that characterized the capital market in recent times.

“Although we are not happy with the performance of the capital market presently, but that’s how the market operates. It is a familiar trend in the global capital market. Right now, we are more concerned about deepening the market and ensuring we have more domestic investors in the market,”

Also on Wednesday, the Commission announced that the processes associated with dematerialisation of the nation’s capital market would be concluded by December 2015. Dematerialisation is a process where all existing share certificates of public companies in the country are converted from the paper to electronic forms.

Already, Gwarzo said 17 of the 22 registrars operating in the capital market have complied with full dematerialisation of share certificates and that the commission was currently partnering stakeholders in the market to conclude the process this year.

The SEC had at its second quarter Capital Market Committee (CMC) meeting last month, ordered Registrars of public companies to return all unclaimed dividends in their custody for up to 15 months, to the paying companies and to file evidence of remittance before June 30. It warned that failure to comply would attract sanctions.

He said “the law on unclaimed dividend in the market is very clear and it states that unclaimed dividend must be returned to the companies after 15 months of payment and remains statue bar after 12 years…

“The process is ongoing, we are doing a lot of public enlightenment to facilitate easy take off, we advice investors to cue into the process,” Gwarzo said, adding that SEC had already instructed registrars to notify shareholders to elect stockbroking firms of their choice ahead of full dematerialisation.

The Director-General also insisted that the Commission would stick to the September deadline for recapitalisation of stockbrokers, adding that “a committee from the NSE and CSCS is already working towards that deadline and in the next two to three weeks, we will know those that will meet the target. The committee is up and doing, having only two weeks to conclude the process”.

Also speaking, Samuel Oluyemi, Head, Business Process, NIBSS, said that the portal was developed under auspices of zero tolerance on unclaimed dividend being pursued by the commission.

Oluyemi said that the platform would allow direct payment of dividend into investors’ account, once the mandate form was completed appropriately and that investors in the mandate form would supply bank account number, registrars shareholders account number, clearing house account number and Bank Verification Number (BVN).

He assured that investors would not be charged for mandate verification and that it had been resolved that dividends could be paid into savings and current accounts.

Oluyemi said that the portal would also accept payment of dividend into dormant accounts, adding that an investor could only withdraw the money after revalidating the account and that registrars had been mandated to provide online access of the mandate forms to investors in Diaspora for efficient implementation of the e-dividend payment platform.

Also, Executive Director of the Nigerian Stock Exchange for Market Operations and Technology, Ade Bajomo said market regulators are committed to critical reviewing of the transaction cost, adding that the idea was to attract more market participants and create value for all stakeholders.

“We put together three initiatives- dematerialisation, direct settlement and smart trading, these three initiatives are very special to promote market inclusion and make it more efficient,” he said.

He also explained that one of the decisions taken at the Capital Market Committee meeting was to close three of the SEC’s zonal offices which include Onistsha, Kaduna and Ibadan.

He said that the closure was to enhance efficiency and cost management of the regulators.

“We did a stock taking and found out that these zonal offices carry out enlightenments and attend to complains. We realized that these zonal offices have less to do since we can deploy these public enlightenments through radio and other information technology. Port Harcourt zonal office should be able to take care of East, Kano should take care of North west while Lagos can cover activities in the West,” he said.

The General Manager/Head of Operations, Central Securities Clearing System (CSCS) Plc , Mr. Joe Mekiliuwa,  said the rising wave of unclaimed dividend which has been a source of concern to market operators is gradually phasing out.