Uche Usim, Abuja
For the umpteenth time, the Securities and Exchange Commission (SEC), has advised Nigerians to dread investing in ponzi schemes as the consequences are always nightmarish.
The Acting Director-General of SEC, Ms Mary Uduk said such outfits are not registered to carry out fund management functions of any sort, stressing that those who stubbornly patronize them end up burning their fingers.
Uduk’s caution is coming at a time the cyberspace is littered with a plethora of unregistered schemes luring unsuspecting Nigerians with unreasonable returns that may never come.
Uduk, who spoke at the weekend in Abuja enjoined investors to be wary of any investment that proposes outrageous returns also advised Nigerians to always cross-check with SEC to ensure that such fund managers and products offered were approved by the regulator.
According to her, the capital market has been properly positioned to attract Nigerians and provide benefits to Nigerians who invest therein.
She added that SEC has sustained its investor education programme to assist people understand whatever issues they have around the capital market.
“But besides that, there are new products coming up every day in the Nigerian capital market. We have a lot of ethical funds, one of the safest areas to invest in is in Mutual Funds, Collective Investments Schemes and we encourage Nigerians to be part of these and others”.
The Acting DG said the SEC is presently undertaking various initiatives to make the capital market more user-friendly such that people can participate in it with greater ease, comfort and convenience.
She added: “There is the added and all-important purpose of ensuring that the gains of your participation, be these dividends, proceeds from share sales/transfers, etc. accrue to you seamlessly, without sweat and in the shortest time possible.
“The purpose is also to ensure that you do not fall victim to the antics of fraudsters who purport to be able to double any amount of money you make available to them as investment value.
“These fraudsters or promoters of Ponzi Schemes are the false prophets of the investment environment, they are the ill wind that blows no good and at whose sight you must flee; they are to be avoided. This is one message you must keep spreading to family, friends, relations and acquaintances in order to save them from the agony of loss of their hard–earned money”.
Uduk therefore advised the general public to distance themselves from such schemes, adding, “Please note that anyone that subscribes to these illegal activities does so at their own risk.”
She also informed investors that the SEC is currently leading the entire capital market industry in an effort to migrate all shareholders to an e –Dividend regime.
The essence of the e-Dividend Mandate Management System she said, is to eradicate or reduce to the barest minimum the incidence of unclaimed dividend.
“Unclaimed dividend is an undesirable feature of the Nigerian capital market which denies investors/shareholders the gains of participating in the capital market. It denies the economy access to the huge amount of money which should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy.
“It is a consequence of the bottlenecks which are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others.
Uduk stated that the e-Dividend regime bypasses these limitations by ensuring that dividends which do not exceed 12 years of issue are credited directly to an investors account after declaration by the paying company and within a stipulated payment period through simple interbank transfer.
Recall that the e-Dividend registration exercise started on November 23, 2016.
Other initiatives by the SEC to ensure that Investors get the benefit from investing in the market, according to Uduk include, multiple subscription regularisation, direct cash settlement, dematerialisation, national investor protection fund, recapitalisation of capital market operators, corporate governance scorecard, new rules for products innovation, development of commodity exchange, collective investment schemes among others.