Exchange Commission Pays ₦29.2b Unclaimed Dividends

The Securities and Exchange Commission (SEC) says more than N29.2 billion has been paid to investors out of the N80 billion unclaimed dividends in the market through e-dividend registration payment system.

Mounir Gwarzo, SEC Director-General said this while addressing Journalists during the post fourth Capital Market Committee (CMC) meeting in Lagos on Friday.

The News Agency of Nigeria reports that with the payment, unclaimed dividends in the market had dropped to N50.80 billion.

Gwarzo said that the payment followed the renewed awareness for capital market investors to embrace the e-dividend registration system of payment introduced by the commission.

He also said that about 1.4 million investors had keyed into the e-dividend system between November 2015 and October 2016.

The 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.

Gwarzo 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.

According to him, from November, 2015 to October till date, more than N29.2 billion unclaimed dividends have been paid to investors.

“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.

“From November 2015 to October this year, over N29.2 billion unclaimed dividends have been paid out.

“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.

“Since we started implementing the master plan, our focus had been the retail investors to make sure they come back to the market and ensure that some of the issues they complain about are addressed,” Gwarzo stated.

He said that the commission had concluded plans to make the Direct Cash Settlement become operational by the first quarter of 2017, apart from tackling the issue of unclaimed dividends to woo retail investors back to the market.

“The direct cash settlement where we mandated the broker who has the mandate of a client should credit the clients account when shares of the client are sold.

“This is against the initial idea that when they sell the shares, the proceeds are credited into the brokers account,’’ Gwarzo added.

He also said that the commission plans to certify licences for various exchanges.

“What we are doing is also to certify licence for an exchange.

“What we have today are unified requirements for companies to set up an exchange now the stratification will lessen the requirement.

“For instance, if you want to set up an exchange under tier 2, the requirement will be lesser than that of tier 1 and if you want to set up under tier 3, the requirement will also be light.

“And the kind of company that will also be listed will be lesser than the other one.

“We think it will draw some of these SMEs to be listed because over the last 20 to 25 years, we have not seen any much progress in the second tier securities market.

“There a few companies that want to set up a few trading platform and we think we have to give them the prerogative to do that,’’ Gwarzo added.