Nigeria’s Securities and Exchange Commission (SEC), at the midweek said it has outlined a number of initiatives that would help ensure the unclaimed dividend debacle in the nation’s capital market becomes history.
Acting Director General of the SEC, Ms. Mary Uduk who spoke in Abuja, described unclaimed dividends as legacy issues that arose way back in the past, and that the major challenge now has to do with identity management. This is being frontally attacked by capital market and other stakeholders.
One way this is being done, she explained, is by educating the public on by providing various stakeholders with a lot of information they need, just as stakeholders have ensured that no unclaimed dividends from new issues.
Although ascertaining the current value of unclaimed dividend in the country has been near impossible with no new information from the commission, the House of Representatives recently mandated its Committee on Capital Market and Institutions to investigate unclaimed dividends in the capital market valued at over N126.03bn.
One way the challenge is being tackled Uduk noted, is identity management which was why bank accounts are being linked with the aid of the Bank Verification Number (BVN).
The capital market, she stressed, taking advantage of such identification number, just as the Central Securities Clearing System Plc and the registrars are working together to ensure that more information from the legacy shareholders are collected and used to update their records.
This, according to her is being used to return outstanding dividends in the system to their rightful owners, in addition to series of engagements with shareholders in recent times on the issue to resolved all outstanding cases.
“The registrars don’t have direct interface with shareholders, they deal directly with stockbrokers. But there is a committee comprising of the SEC, the registrars, the stockbrokers, the issuing houses, the CSCS and NSE working on that, in addition to the e-dividend management committee.
“The committee has come up with a resolution which was adopted at the last Capital Market Committee meeting. Part of the resolutions was that stock brokers will update information in respect of their client.
“Before 2008, we had a lot of Nigerians who bought shares in the capital market and at that time we did not have BVN numbers. Even some of them did not provide their account numbers. What was agreed was that we would update information of such shareholders. That information will be transmitted to the CSCS who will update their own information and send them to the registrars,” Uduk stressed further.
It was also agreed, she continued, that there will be no transaction in respect of any account that information is not updated, while capital market operators will be given a time frame within which to resolve all such issues.
Uduk also disclosed that the Commission has approved the rule in respect of electronic offering which will address some of the problems associated with unclaimed dividends.
“We believe that by the time we commence that, it will address that issue of unclaimed dividend. Before you can complete the application, the system will validate your account number, the system will not accept incomplete application. We believe that in addition to the e-dividend mandate, these other initiatives that the Commission is doing with other stakeholders will address the issue of unclaimed dividends” she added.