Unclaimed dividends: SEC wades in, reduces processing time to 1 week for beneficiaries

The Securities and Exchange Commission (SEC) has moved to find an enduring solution to the perennial unclaimed dividend issue. On Wednesday, SEC cut the turnaround time for processing and transferring shares from dead shareholders to their beneficiaries from three weeks to one week.

SEC believes the move will help reduce the humongous amount of unclaimed dividends in the Nigerian Stock Exchange as much as possible.

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The capital market regulator made the disclosure through its acting Director-General, Ms Mary Uduk, at a sensitisation programme held recently in Lagos under the aegis of the Lagos State Probate Registry.

Why this Matters: The decision will not only help beneficiaries of deceased investors to promptly receive their shares and dividend bequests, it will also guarantee service efficiency on the part of the SEC, which will, in turn, enhance its corporate image.

More so, with the new development, beneficiaries and administrators of the deceased’s estates will have the confidence to approach companies where their benefactors held shares to claim their inheritance.

SEC Building

SEC’s order to Registrars: In order to effect this change, registrars have been mandated by the SEC to effect share transfer from the deceased to beneficiaries within one week of receiving transfer requests from administrators/executors.

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SEC has also ordered registrars to dispatch the Letter of Administration to the probate registry within 24 hours of receiving it for verification.

Required Documentation Disclosed: The Director-General of SEC went further to reveal the obligations which must be fulfilled, as well as key documents to be provided for the share transfer process to be effectively executed as announced.

One of the obligations is that the administrators/executors are to provide a letter of introduction, introducing themselves as the legal representatives of the estate. This should contain the names, addresses, signatures, and BVNs of the individual Administrators/Executors.

Secondly, the original copy of death certificate from the National Population Commission (NPC), original probate letter or Letter of Administration for sighting or the Certified True Copy (CTC) from a Notary Public must be provided.

Meanwhile, the Acting SEC DG noted that in the case where the Administrator/Executor is not able to fulfill the aforementioned requirements, the Registrar may require confirmation through insurance, indemnity or interview the SEC stated.

In the meantime, the fee chargeable for transmission of shares by registrars have been reduced to one percent of the total value, additional five percent Value Added Tax (VAT) for shares of N5 million and below, and 0.5 percent of the value and five percent VAT on shares above N5 million with a maximum chargeable amount of N200,000, excluding VAT.

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