The management of the Securities and Exchange Commission (SEC) says it is not against the Federal Government’s proposal to set up an Unclaimed Dividends and Balances Trust Fund.
Making clarifications at the one-day Public Hearing on the Finance Bill, 2020 by the Senate in Abuja, Director-General of the SEC, in a presentation said the Commission seeks power to continue constructively managing the challenge for the development of the Nigerian capital market.
Dividends are cash rewards that a company gives to its shareholder.
According to him, “we are not against the proposal to set up Unclaimed Dividends and Balances Trust fund. Our concerns are with respect to the governance structure of that proposed fund and that is why we are asking for reconsideration. We are advocating modifications of the provisions with regards to management and governance of the trust fund to avoid possible harm to the capital market which is still struggling to survive.
“SEC, being the capital market regulator and mandated by the Investments and Securities Act to protect the interest of the investors, to be the one to administer or to manage or to supervise the operations of that fund, that is what we are requesting”.
The DG, who was represented by Abdulkadir Abbas, the commission’s Head, Securities, and Investments Services (SIS) Department, said the SEC would continue to monitor the compliance of the rules and regulations on the treatment of unclaimed dividends. The commission’s ultimate objective, he continued, is to pool unclaimed dividends into a well-structured and well-governed Fund with independent management under the existing National Investor Protection Fund (NIPF) as found in other jurisdictions like Kenya and India.
He stressed that, alternatively, the unclaimed Dividends Trust Fund could be set up as an independent Fund to be managed by the private sector (Professionals Fund Managers) under the supervision of the Commission.