E-dividend scheme reduces unclaimed dividend by 33 percent – SEC

The Director General of the Securities and Exchange Commission (SEC) Mr. Mounir Gwarzo, has said registrars have been able to pay out N29.3 billion of the N90 billion of unclaimed dividends recorded at the beginning of the year, through the e-dividend scheme.

The SEC DG’s claims was corroborated by Head, Vertical Markets Group, Nigeria Inter-Bank Settlement System (NIBSS), Samuel Oluyemi, who said precisely N29,277,739,604 has been paid out to investors, representing a decline of 32.6 percent in unclaimed dividend as at October 2016. Approximately one year ago, the SEC launched the e-Dividend Mandate Management System (e-DMMS) in conjunction with the Central Bank of Nigeria (CBN) and all Deposit Money Bank as a means of reducing the level of unclaimed dividends in the capital market, ease the direct cash settlement initiative and generally boost capital market processes that will enable investors get their returns with ease.

According to Oluyemi, the eDMMS portal utilizes NIBSS’s robust document management system to which the e-dividend mandate forms filled by the investor can be uploaded,” he explained.

The e-dividend form, which can be obtained and filled at bank branches or in the office of a registrar or stock broking firms, helps the registrars trace, combine and seamlessly enroll shareholders investments/ portfolio, leveraging the robust know-your-customer feature of the Bank Verification Number system to ensure the payment of dividends directly into shareholders’ bank accounts.

Gwarzo, speaking with financial journalists at the post-Capital Market Committee in Lagos on Friday, commended the registrars for this achievement. He added the SEC achieved this milestone through the nationwide advocacy of all the stakeholders in the market.

“E-dividend is in the interest of the retail investors, our focus is to bring back the confidence of the retail investors to the market,” the DG said He added that incentives and time extension that was put in place to encourage investors in embracing the e-dividend scheme will continue until the market achieved 100 percent edividend transition.

He further emphasized that by end of June 30, 2017, registrars of companies will stop issuing physical dividend warrants to shareholders.

Speaking on the circular concerning the establishment of Nigerian Capital Market Development Fund (NCMDF) set up to address the issue of all unclaimed dividends that is above 12 years, the DG noted that a committee has been set up to work out the modalities for the trust fund.

He said that the committee members comprising of the relevant market stakeholders are reviewing the Investments and Securities Act and the Companies and Allied Matters to decide if it’s appropriate to allow investors to forfeit their dividend once it’s above 12 years or leave it to a time without end.