Nigerian Exchange Limited (NGX) has said that a mix of financial literacy and awareness will help to reduce the growing number of unclaimed dividends in the capital market.
The Divisional Head, Capital Markets, NGX, Jude Chiemeka stated this at a recent retail investors webinar themed; How to Process Outstanding Dividend.
This is coming after efforts by the Securities and Exchange Commission (SEC) to tackle rising unclaimed dividends in the nation’s capital market have continued to hit a brick wall.
According to the commission, unclaimed dividends in the Nigerian capital market had risen to N190 billion from N180 billion recorded in 2021.
Reacting to this development, Chiemeka noted that some retail investors are unaware of the backlog of unclaimed dividends that have accrued to them over many years, especially those investors with legacy investments held on their behalf.
Whilst adding that the webinar- held in collaboration with Futureview Asset Management Limited, is aimed at providing procedures to investors, especially the retail segment on how to process outstanding dividends and retrieve unclaimed dividends, Chiemeka said a mix of financial literacy and aggressive awareness can help to reduce unclaimed dividends in the market.
He also added that the Exchange remains committed to utilizing technology to optimize intermediaries and increase access to the market for retail investors.
He said,
- “To this end, we have established a digital gateway to democratize access to the market, reduce friction, and drive retail participation in the capital market.”
- Chiemeka assured that the SEC would continue to work assiduously with stakeholders to reduce the cases of unclaimed dividends in the market to the barest minimum.
What you should know
The Securities and Exchange Commission (SEC) has stated that the unclaimed dividends in Nigeria’s capital market now stand at the region of N190 billion.
The Director-General, of SEC, Lamido Yuguda, disclosed this during the commission’s second Capital Market Committee (CMC) briefing which was held in Lagos via Zoom on Friday.
The Capital Market Committee (CMC) was established to serve as a medium for the exchange of ideas among market stakeholders as well as for feedback to the Securities and Exchange Commission (SEC) on how to continuously improve market activities and regulation.
Yuguda stated that the commission is working with the Nigeria Inter-Bank Settlement System (NIBSS) on the e-dividend portal currently going through upgrading and data repairs.
Challenges
While explaining that unclaimed dividends are still a recurring problem in the market, Yuguda noted that the SEC is currently facing challenges such as identity management, and multiple subscriptions which is aggravating the number of unclaimed dividends.
- “The estimated figure of unclaimed dividends so far in the market stands at N190 billion. The SEC is working with NIBSS to make changes to the electronic dividend portal which is currently going through some form of upgrading and repair.
- “We are working very hard to ensure we reduce the number of unclaimed dividends, and this is why we are upgrading the e-dividend portal with NIBSS to restore investors’ dividends and reduce unclaimed dividends and we reiterate that every person, who has come to the capital market and invested money, should be able to get his dividends as and when due,” he said.
Meanwhile, SEC should update the unclaimed dividend platform. A lot has happened since it was released or opened. The N190billion is doubtful. The Transfer form.should be made to contain the edividend information instead of treating them seperately. Thirdly, SEC should release the investors funds on delisted dangote flour. How will investors be willing to approach the market when the regulators are frustrating the process. Registrars should stop deducting from.the unclaimed dividend when bonafide owners approach. Registrars are using the unclaimed dividends to cheat investors.
There should be a connecting mechanism between CSCS at the point of account opening and the Registrars. Since investors provide bank data and signatures at the point of account opening at CSCS, these database should be made accessible to the Registrars to reduce the problem of the ever increasing figure of unclaimed dividends.
stock brokerages need to help investors here to claim the dividends. most people used them as a point of first contact and with a little fee the stockbrokers should help solve this problem. Difficult for an individual investor to go about chasing the different registrars especially when they are not resident in Lagos or other large cities in Nigeria.
I invested in 2008 and uptil now no information about the investment.It it’s a great deservice by the various registrars to turn off requests by many retail investors to regularise their statutory declaration .