SEC adopts new measure to tackle unclaimed dividend in capital market
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.”