•Suspends Regularisation Deadline
The Securities and Exchange Commission (SEC), at the weekend said it has discovered that some persons are avoiding the offer it made for the regularization of their accounts opened for the purchase of shares with different names, for fear of prosecution.
Acting Director-General of SEC, Ms Mary Uduk, who spoke during the post-capital market committee meeting on Friday, said the call for regularization of such multiple accounts as part of efforts to reduce and thereafter eliminate the unclaimed dividend hiccup.
Many of those who purchased company shares during the indigenization and privatization exercises of the federal government bought such shares using different combinations of their names. This has made it basically impossible for such persons to claim their investments.
She announced the suspension of the deadline for affected shareholders to regularize them, based on a request for an extension of the deadline of multiple accounts regularization by the SEC’s Multiple Subscription Committee.
Presenting its status report of the ongoing engagement with the Central Bank of Nigeria (CBN) and Committee of Heads of Banking Operation to display multiple accounts regularization banners in banking halls across the country, the committee said the request is based on the need to create more awareness.
The Committee also reported that CMOs have commenced the filing of a report on regularized accounts with the commission, on a quarterly basis,
According to Uduk, “we are keeping it open for now with no deadline. We are also encouraging investors to take advantage of this to regularise their accounts and claim their dividends”.
She listed other resolutions reached at the meeting to include, “Registrars are to discontinue the practice of requesting for confirmation of bank signature during the E-DMMS process. CMOs are to display awareness campaign banners of e-DMMS at their offices and Venue of Annual General Meetings (AGM). Capital market operators should also work with the Commission to share awareness information on their social media platforms”
She said the commission also reviewed a request from the Association of Stockbroking Houses of Nigeria (ASHON) seeking to extend the time for compliance on the transfer of complete investor data among operators such as brokers, Registrars and the CSCS.
Reacting, she assured that the position of the commission will be communicated to the relevant parties.
Determined to deepen liquidity in the nation’s bourse, the SEC said it is engaging the National Pension Commission (PENCOM) and the Asset Management Corporation of Nigeria (AMCON) on securities lending.
Uduk said that the commission was engaging PENCOM on modalities that would permit Pension Fund Administrators (PFAs) to participate in Securities Lending. Securities lending is the act of loaning a stock, derivative or other security to an investor or firm.
Securities lending requires the borrower to put up collateral, whether cash, security or a letter of credit.“We have been engaging not only PENCOM but all local institutional investors that have a substantial holding of equities and the essence of having this securities lending is to actually deepen our market.
“All of us are contributing to our own pension accounts and these PFAs are buying equities.
“What they do is to buy and hold, they don’t sell and they hold it, so the essence of securities lending is now to give room for them to make money and so that the money will now add up to their own contribution fund.“We have a framework that has been approved and we are encouraging the market to go into self lending by meeting these institutional investors.
“Pension is the highest institutional investor in our market, they will now lend out these securities and when they lend out, it will be credited back to the pension fund account.“At the end of the contract, they will get their securities back.“Instead of holding the securities, they are making money out of it; that is the essence.
“So, we are engaging PENCOM to see it as an investment opportunity, and they have bought into the idea.
“We are discussing to see how they can be able to come up with their guideline based on their provision of the Act to allow securities lending to take place.
“In addition, we are engaging another institutional investor, AMCON.
“It is a holistic approach to have a win-win situation in our market,” Uduk said
Speaking on the e-Dividend Mandate Management System (e-DMMS) introduced to curb unclaimed dividends, Uduk said that a total of 2.82m had enrolled in the platform at the end of the third quarter of 2019.
She said that registrars had been directed to discontinue the practice of requesting for confirmation of bank signature during the E-DMMS process to tackle unclaimed dividends.
Uduk said that capital market operators were to display awareness campaign banners of e-DMMS at their offices and venue of Annual General Meetings (AGM).
She stated that the Non-interest Finance Committee presented the importance of granting the PFAs permission to invest a given percentage of a willing contributor’s Retirement Savings Accounts in Non-Interest capital market products.
Caption: SEC board chairman, Femi Lijadu, the acting DG, MS. Uduk and Ike Chioke, chief executive of Afrinvest at the Q3 Capital Market Committee.