A cross-section of shareholders in the country have called on the Securities and Exchange Commission SEC to extend the deadline for shareholders to conclude e-payment registration for unclaimed dividends as the fate of over 100 billion unclaimed dividends heighten. SEC, the capital market regulator ended the registration on February 28, 2018.
The shareholders, accused registrars of frustrating the electronic dividend (e-dividend) registration, by not implementing the e-dividend mandate and merging multiple accounts even after investors have registered for the e-dividend.
Chairperson of Pragmatic Shareholders Association of Nigeria, Mrs. Bisi Bakare said
”There have been several complaints from some of our shareholders on the e-dividend registration. The exercise still has some hiccups as shareholders still get dividend warrants in their addresses both old and new. Even the merging of multiple accounts has not recorded the expected results”
Consequently, they requested that the SEC should allow continuation of the free e-dividend registration exercise, claiming that most registrars do not have the capacity in terms of manpower and technology to meet the deadline.
The e-dividend was introduced to address the increasing trend of unclaimed dividends in the capital market. The Direct Cash Settlement, DCS was also part of the ongoing initiatives introduced by SEC and Nigerian Stock Exchange to protect investors and eliminate fraudulent activities in the Nigerian capital market.
The DCS which is the direct payment of proceeds from the sales of shares/securities into an investor’s nominated bank account. It is a process where cash proceeds from trades executed by stockbrokers on the Exchange settle directly into investors’ bank accounts.
There have been series of allegations that some operators, especially registrars, trade with the unclaimed dividends in their possession and looking at the quantum of the money available as unclaimed, the commission needs to discourage this act and reduce the number of unclaimed dividends.
SEC launched the e-dividend platform in July 2015 and set December 2015 as a deadline. After protests by shareholders, the deadline was shifted to December 2016. In January last year, it decided to extend it until June 30, 2017. It was again extended until December 31st, 2017 and lastly, February 28 this year. SEC also created a portal, for shareholders to search for stocks they own and register for electronic dividends.
According to Sammie Opeoluwa, a capital market analyst, it is pertinent to note that at the center of the issue of unclaimed dividends is the problem of ignorance on the part of shareholders.
“There is really no cause for alarm as far as the issue of unclaimed dividends is concerned. We need to educate investors at this time that their unclaimed dividends are safe and can still be claimed provided it is not up 12 years as stated in Section 385 of CAMA.”
“Based on this SEC directive, shareholders still need to contact the affected registrars for their unclaimed dividends who will now refer the issue to the paying company after it has been duly verified that they have outstanding dividends to claim before they eventually get paid.”