SEC gives deadline for multiple accounts’ consolidation

…investors to contact stockbrokers, registrars

Investors, who had participated in public offers, through multiple subscriptions, have been advised by The Securities and Exchange Commission (SEC), to consolidate their accounts before September 1st, 2017.

SEC, in a circular, titled: “Circular to the General Public on Multiple Subscriptions in Public Offers” issued last week, explained that multiple subscriptions to public offers occurred during the market boom, when investors joggled their names in different forms to enable them to purchase more than the permitted units of shares in public offers.

The Commission, being aware of the negative effect of this act to the market, constituted a market-wide committee with the aim of proposing the manner by which securities, as well as. dividends accruing to such persons via multiple applications, should be treated.

According to the notice obtained from SEC’s website, the Committee had concluded its assignment, and its recommendations were adopted by the entire capital market community.

The Commission said, “Consequently, the commission. on behalf of the Nigerian capital market community. wishes to inform the general public that forbearance is hereby granted to investors whose identities can be verified.

The SEC further said that, “Concerned investors are therefore advised to contact their stockbrokers or registrars with proof of identity to consolidate their accounts on or before September 1, 2017, failing which, all Securities and accruing dividends shall be transferred to the Nigerian Capital Market Development Fund.

Regarding Securities, which have not been claimed and cannot be verified, the SEC noted that such securities as well as accruing unclaimed dividends shall be transferred to the Nigerian Capital Market Development Fund.”

The SEC DG Mr. Mounir Gwarzo recently said it was set to launch a market development fund this year, to lead efforts in galvanising capital market activities in the country.
Mr Gwarzo who disclosed this at the first post-Capital Market Committee press conference for the year 2017, said that the commission would inaugurate the Nigerian Capital Market Development Fund (NCDMF) and its board at the next CMC meeting.

He stated that the fund initiated by SEC with a seed fund of N5 billion, will be used for the benefit and development of the market and will not be managed by the commission but other operators.

Giving further updates on capital market developments, the circular from the SEC noted that it is also set to amend rules and regulations on revenue bonds.

According to the SEC, The proposed amendment is to align the rules with the proposal to discontinue issuance of Dividend and return money warrants in the capital market and replace same with electronic transfers only.

The SEC had earlier set June 30, 2017, as the deadline for issuance of dividend warrants.
The amendment will thus provide clarity on timeline for transfer of declared dividends, by paying companies to registrars and subsequent payment of same to beneficiaries.

The proposed amended rules will also provide clarity on the investor protection fund that unclaimed return monies shall be paid into with a provision for issuance of revenue bonds by states, local governments and government agencies.

Also,“It also provides disclosure requirements and enhancements for the bonds while introducing additional obligations on states, local governments and government agencies to provide sufficient information to enable investors to make an informed decision regarding investment.”