Uche Usim, Abuja

To reduce the bloating volume of unclaimed dividends, the Securities and Exchange Commission (SEC) has urged  investors to provide sufficient proof of ownership to be permitted to regularise their accounts into one.

This advice was given by its acting Director General, Ms Mary Uduk, at  one day national seminar in Ibadan on unclaimed dividends.

Represented by Mr Stephen Falomo, the Director, Lagos Zonal Office of SEC, Uduk said there were enormous benefits for multiple accounts regularisation and e-dividends registration for investors.

Uduk stated that the capital market community has opened a forbearance window to allow investors with multiple subscriptions/applications in public offers regularise these subscriptions under a single account.

“Investors who provide sufficient proof of ownership will be permitted to regularise their accounts into one. The forbearance window closes on December 31, 2019,” she said.

The SEC boss lamented that continuous retention of dividends by companies has a great potential of distorting the true financial position of companies and misleading investors and other members of the public.

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“The huge amount of unclaimed dividends could discourage foreign investment as well as discourage members of the public from staking their funds in the market.

“Non-receipt of dividends discourages investors in stock market and encourages them to search for alternative investment outlets such as the real sector and money market. Consequently, public companies are denied the opportunity of cheaper source of finance.

Uduk explained that e-dividend (otherwise known as electronic dividend) is a secure on-line means of paying dividends directly into shareholder’s account instead of printing and mailing dividend warrants, as was the case before now.

“It entails a shareholder who has a bank account (savings or current account) with any bank, to give his/her accurate account details, including Biometric Verification Number (BVN), to the registrar of the company and his/her dividend would be paid directly into that account.

“Each investor is required to enroll for the e-dividend regime by completing an e-Dividend Mandate Form and submitting same at the nearest branch of his/her bank or registrar’s office for identity validation, leveraging the BVN platform of the Nigeria Inter-bank Settlement System  (NIBSS). Successfully BVN validated mandates are approved and passed to registrars for dividend payment, ” she added. In his remarks, Mr Eric Akinduro, the Chairman of  Ibadan Zone of Shareholders’ Association, urged the SEC to intensify efforts at encoraging investors to embrace the e-dividend registration.

“SEC must intensify activities to entice investors to embrace the e-dividends registration for the volume of unclaimed dividends to reduce within the shortest time frame. I want to appeal to the SEC that multiple account regularisation, which was extended to December 2019, should be an ongoing process; for many accounts are under processing, particularly deceased shareholders.

“Standardisation of registrars operations should be introduced, across board,” Akinduro added.