The Securities and Exchange Commission (SEC) wednesday said Registrars operating in the Nigerian stock market will no longer issue dividend warrants to shareholders as from June 30, 2017. Rather, all dividends would be paid electronically.
The Director General of SEC, Mounir Gwarzo, who disclosed this at the post Capital Market Committee (CMC) meeting media briefing in Lagos, said the move would check the growth of unclaimed dividends in the market.
According to him, before 2017 date, the electronic-dividend registration would have gained significant traction.
“From June 30, 2017 no registrar will issue dividend warrant again in the market. This will not only assist in reducing unclaimed dividends in the market but will also compel those yet to embrace the e-dividend registration to do so,” he said.
He said despite the efforts to enlighten investors to register for e-dividend payment, only 6,000 investors had registered for the e-dividend payment platform that was launched in collaboration with the Central Bank of Nigeria and the Nigeria Inter-Bank Settlement System (NIBSS).
Gwarzo noted that the aim of the e-dividend payment was to eliminate the difficulty encountered by retail investors in claiming their dividends, noting that the commission will continue to partner stakeholders to ensure that all retail investors embrace the e-dividend platform.
In this regard, he said the CMC had resolved that every bank and registrar would appoint an e-dividend champion that would interface with investors to settle issues arising from the e-dividend registration process.
Gwarzo said that the e-dividend champions would work closely with NIBSS to ensure that challenges arising from the e-dividend are settled within three to four days.
The SEC boss added that the regulator has also agreed to continue to be responsible for the cost of e-dividend registration till December 31, 2016 so as to encourage more investors to embrace the initiative.
He promised the SEC will continue to with its enlightenment campaign to ensure full participation of all investors and called on other stakeholders in the market to join in the enlightenment campaign.
Gwarzo stressed that the e-dividend payment platform would ensure prompt payment of dividends into investors accounts, describing it as a game changer in the market that would ensure that infractions are reduced to the barest minimum.