Mary Uduk - The Securities and Exchange Commission (SEC) has urged investors with multiple shareholding accounts to regularise such before December 31, 2019.

The capital market has continued to record high incidence of unclaimed dividends due to the provision of inadequate proof of ownership of shares by investors, the acting Director General of the Securities and Exchange Commission (SEC), Mary Uduk, has said.

Uduk, who spoke in Ibadan at a one-day seminar on reducing incidence of unclaimed dividends, said investors find it difficult to regularise their accounts and harmonise them due to inadequate proof of ownership of such accounts.

Represented by the Director, Lagos Zonal Office of SEC, Stephen Falomo, the acting DG highlighted the benefits of regularising multiple accounts and e-dividends registration for investors.

She said the capital market has opened a forbearance window to allow investors with multiple subscriptions/applications to public offers to regularise them under a single account name.

“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 lamented the continuous retention of dividends by companies. She said this has the potential to distort the true financial position of companies and mislead investors and other members of the investing public.

“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,” she said.

Ms Uduk disclosed that e-Dividend (otherwise known as Electronic Dividend) is a secure on-line means of paying dividends directly to the 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 enrol 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 NIBSS. Successfully BVN validated mandates are approved and passed to Registrars for dividend payment,” she added.

In his remarks, the chairman of Ibadan Zone of Shareholders’ Association, Eric Akinduro, urged the SEC to intensify efforts at enticing investors to embrace the e-dividends 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. Standardisation of registrars operations should be introduced, across board,” Akinduro added.

The Group Managing Director, Odu’a Investment Company Limited, and chairman at the event, Adewale Raji, charged the association to take the lead in ensuring its members were duly registered.

“In order for us to reap maximum benefits from the e-dividends mandate, I want to urge the association to take on board this unique opportunity.

“As a matter of responsibility, we need to encourage members to take advantage of this opportunity.

“At the zonal or state level meeting, we need to put in place a proper process whereby we enlist people who respond and see them through the process of e-dividends registration and also address other issues relating to accessing dividends,” Mr Raji said.

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