SEC adopts new measure to tackle unclaimed dividend in capital market

Finance Director, Cadbury Nigeria Plc, Yimika Adeboye(left); Managing Director, Cadbury Nigeria Plc, Roy Naaman; Executive Officer, Nigerian Stock Exchange (NSE), Oscar Onyema; Chief Counsel/Company Secretary, Cadbury Nigeria Plc, Fola Akande, and Head, Domestic Primary Markets, NSE, Tony Ibeziako, during a courtesy visit to Cadbury Nigeria Plc.

Finance Director, Cadbury Nigeria Plc, Yimika Adeboye(left); Managing Director, Cadbury Nigeria Plc, Roy Naaman; Executive Officer, Nigerian Stock Exchange (NSE), Oscar Onyema; Chief Counsel/Company Secretary, Cadbury Nigeria Plc, Fola Akande, and Head, Domestic Primary Markets, NSE, Tony Ibeziako, during a courtesy visit to Cadbury Nigeria Plc.

Inaugurates e-dividend champions for banks, registrars

As part of its commitment to reduce to the barest minimum, hurdles associated with electronic dividend registration in the market, the Securities and Exchange Commission (SEC), has inaugurated the e-dividend champions for banks and registrars at its Lagos Zonal office.

Already, the Commission has issued directive mandating registrars operating in the Nigerian capital market to end issuance of dividend warrant to investors by June 31, 2017.

E-dividend is an electronic dividend payment platform, which will enable an investor’s account to be credited after 24 hours that dividend is paid.

The new scheme, according to Commission, would ease the challenges associated with payment of dividends and reduce the volume of unclaimed dividends in the country.

“The e-dividend champion would help ease shareholders’ difficulties during registration, as they would handle the operations of each bank on the registration.

“Furthermore, where there are issues on the registration, the champions would have the responsibility of forwarding all shareholders complaint on registration to Nigerian Interbank Settlement System (NIBSS), to give clarifications on the issues within three days,” it stated.

For smooth implementation of the new scheme, According to the Commission has commenced trainning for the operators and sensitise stakeholders on the dynamics of the e-Dividend Mandate Management System (e-DMMS) Portal.

“In a deft move to fortify the on-going e-dividend registration campaign, SEC noted that it held a crucial e-dividend technical committee review meeting, on Monday, which was chaired by the Director-General of SEC, Mounir Gwarzo. Banks and Registrars were directed to nominate e-dividend champions that would be responsible for information dissemination to their branches and for easy contact at the meeting,” it said.

The apex regulator listed the objectives of the inauguration to include; driving information dissemination to all banks and registrars branches nationwide, providing means of easy contact/feedback to and from various branches nationwide, ensure only the approved and standardised mandate form is used by all registrars and banks,

Others include: to drive the establishment of e-dividend desk, in all their branches nationwide, to facilitate the escalation of issues between their individual organisation, NIBSS, SEC, and CSCS, to ensure every uploaded mandate form is approved within 72 hours and to share user experience.

The Commission however, encouraged investors to go to their banks or registrars to register and enjoy the free registration that will last up to the end of the year 2016.

Gwarzo, at the post-Capital Market Committee (CMC) second quarter press briefing, held in Lagos recently, bemoaned poor investors’ patronage on e-dividend registration in the market, noting that only 6,000 investors have accessed the platform.

The SEC boss, at the meeting, issued a directive mandating registrars operating in the Nigerian capital market to end issuance of dividend warrant to investors by June 31, 2017.

This, according to him, would compel retail investors to embrace the e-dividend registration exercise, increase the low level of patronage and stem the rising unclaimed dividend figure in the capital market which is currently put at N80 billion.

He explained that the CMC has agreed that all banks should appoint an e-dividend champion that would interface with retail investors to ensure a seamless registration.

Gwarzo added that the SEC has also extended the write-off period for free registration process from September 14th to December 31, 2017, to enable more investors to partake on the exercise.

“With all efforts to encourage participation on e-dividend, only 6,000 retail investors have registered and this is not encouraging.

“People are frustrated with the misunderstanding between the banks and registration and at the meeting, we agreed that banks should appoint e-dividend champion to handle the operations of each bank on the registration.

“We also agreed that henceforth, by the end of June 31st 2017, no registrar will issue e-dividend warrant to any investor to enable them embrace the exercise.”



4 Comments
  • Mazi JO

    ou are going to deny Investors

  • Mazi JO

    You are going to deny the Investors the warrant to their dividends because you are having problems effecting your e-dividend policies? Incredible! Please look inwards for the failure of the whole process. Case in point, I have some shares in UACN. You know that UAC Registrars used to control UACN’s Registry. I went to Niger House from Aba in Abia State to have the e-dividend process exacted. I filled out the forms, went to Court and had them sworn in. Duly submitted, I went back to my station cocksure everything is consummated. Now, the last time I visited to check, UAC Registrars is now merged or acquired by Afriprude registrars. I visited Afriprude at their Ikorodu Road Office. They went in and came out with the exact number of shares I had at he time. But when the e-dividend payments are forwarded to the account given, it falls short of the nominal holdings in the number of shares accommodated. There is no streamline between CSCS, the Registry outfits/Individual Investors and the corporate operations. Corporate operations for it is fundamentally wrong to declare dividends with the founds sitting in their Vaults or in unclaimed dividends dormant cistern. Now, if you stop issuing warrants and you have only 6,000 heeding your e-dividend transforming call, are we not confounding matters here? Again think about how many of these Investors have Bank accounts? The stoppage of issuing warrants may contravene our corporate Laws. Don’t open the gates for litigation.

  • Ayo Atoyebi

    I won’t lump all the Registrars together in this because based on personal experience I know many of the Registrars are efficient and go the extra mile to help their customers become e-dividend mandated. But there are some of these Registrars that appear to deliberate make it more difficult to become e-dividend mandated under the guise that they are preventing fraud. I will illustrate with this personal exmple. There is this particular Registrar that I won’t name online here. I have nine companies to which they are the Registrar. All of these accounts are already mandated. Then couple of months ago I added a new company to my portfolio. Then I called up the Registrar to say I have nine companies that are already mandated, I have this new one that I Just added that I would like to apply e-mandate based on what I already have. Mind you, all the pertinent information is the same: my identity was not in question. But they insisted they would not do it on the ground that the new addition does not have a specimen signature on file. My argument that the other nine companies already mandated have the same information which they are not contesting did not provide a reconsideration. They insisted I have to have my broker process a transfer form, fill an e-dividend mandate form and take it to my bank for confirmation and then bring it to them before they would e-mandate the account. To this I replied, rather go through all that I would rather wait for you to mail the warrant to me. I would understand their argument of fraud prevention if this was the first and the only company I have with them. But in this case, I think they were just being unduly difficulty. This is the kind of experience retail investors face with some of these Registrars. I hope those planning this new move would consider this type of practices.

  • Truth is bitter

    Similar experience like Atoyebi, some of the registrars are stubborn and are ready to frustrate this exercise unless well monitored. I was asked to provide specimen signature through my stockbroker. Apparently my stockbroaker has been suspended by SEC and only God knows when the suspension will be lifted. Many of the Banks proof innocent of this new development and need close monitor to implement this, they are still operating on the old method without fully processing the e-dividend.
    Some Registrars deliberately created several shareholder account numbers to cause confusion, and when they want to pay they only pay the least dividend and pocket the big one.

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