SEC Moves to Tackle Unclaimed Dividends Menace

By Tony Obiechina, Abuja

The Securities and Exchange Commission (SEC), announced at the weekend that considerable progress has been made in the implementation of its consolidation of multiple shareholder accounts even as electronic Dividend Mandate Management System (e-DMMS) has so far been consolidated at about 3.4bn shares.

According to a statement by SEC in Abuja on Sunday both measures were introduced as part of measures to check the growth and possibly eliminate the unclaimed dividend menace in the nation’s capital market.

Acting Director General of the SEC, Ms. Mary Uduk who made the announcement, said a total of 2.7m share accounts have so far been captured under the e-DMMS.

She expressed satisfaction with the regularization of multiple shareholders accounts since it was launched last year, describing investor response as very impressive.

According to her, with the help of the Multiple Subscription Committee, 3.4bn shares have so far been effectively consolidated.

She said, “the committee informed the meeting that the Committee of Heads of Banking Operations had agreed to collaborate with the commission to display banners in (their) banking halls all over the country, sensitizing the public on the regularization of multiple subscriptions of shares.”

Similarly, stockbrokers and registrars are requested “to make available to the Committee on Multiple Subscription Account, on a periodic basis, the number of regularized accounts.”

Company Secretaries of listed companies, she further said, “have also agreed to display similar information on their website and offices.”

SEC is also to help discourage unclaimed dividends from building up from securities of newly-listed companies, just as modalities should be developed for validating shareholders’ registers, such that “registrars are furnished with incomplete information such as missing account numbers.”

Speaking further, the Acting DG noted that the issue of unclaimed dividend is dynamic, given that as the old heap is being cleared by the registrars, new ones are mounting by the day.

“There are plans to develop a standardized data form, which seeks to consolidate registration and access to processes in the capital market by investors”, she added.

The DG also disclosed that the commission was also mandated to urge the Central Bank of Nigeria (CBN) to include e-DMMS charges in its Guideline for Bank Charges.

“This is because the CBN has published charges for the banks; this means that any transactions carried out by any bank, there is an established charge”, she explained.

“The e-dividend charge is not part of the charges from the CBN and so because of that investors are having issues with banks where for instance, they are charged for some transactions that are not listed as bank charges which they do not know.

“They complained to us and so we decided that we will engage CBN to actually make this part of their charges and so any e-dividend carried out will be charged by the CBN.

“This came up as a result of us stopping the payment of the e-dividend mandate as we were underwriting the cost for the initiative before we mandated investors to pay a token of N150 per mandat

“We believe the capital market of our dreams can only be achieved through the collaboration of all stakeholders,” Uduk added.

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