By Goddy Egene
The value of unclaimed dividends in the nation’s capital market has reduced by N29.2 billion from N80 billion, as a result of renewed awareness campaign by the Securities and Exchange Commission (SEC) for capital market investors to embrace the e-dividend registration introduced a year ago.
The e-dividend payment platform was introduced to address the rising incidence of unclaimed dividends in the Nigerian capital market.
Addressing journalists in Lagos last Friday at the post-fourth Capital Market Committee (CMC) press briefing in Lagos, the Director General of SEC, Mounir Gwarzo, said since the introduction of the e-dividend registration, N29.2 billion has been paid to investors out of the N80 billion unclaimed dividends as at end of last year.
He disclosed that about 1.4 million investors have keyed into the system between November 2015 and October 2016.
According to him, efforts made by the commission to ensure that the era huge unclaimed dividends in the market become a thing of the past is already achieving result with the e-dividend registration system.
He said: “When we started the e-dividend, the major challenge was for people to key into the e dividend mandate there are unclaimed dividend that has not been able to claim, the registrars were compelled to pay all the arrears of unclaimed dividend. From November last year to October this year, over N29.2 billion unclaimed dividends has been paid out. In this country, we have never had this kind of initiative that has reduced unclaimed dividends like we had today. Apart from the investor getting his dividend where ever he is, that investor will be able to get dividend that in the last five years he has not been able to get.
“The e dividend is for the interest of retail investors. Since we started implementing the master plan, our focus had been the retail investors to make sure they come back to the market and ensure that some of the issues they complain about are addressed.”
Gwarzo noted that aside tackling the issue of unclaimed dividends to woo retail investors back to the market, the commission has concluded plans to make the Direct Cash Settlement become operational by the first quarter of 2017.
“The direct cash settlement where we mandated the brokers who have the mandate of a client should credit the clients account when shares of the client are sold. This is against the initial idea that when they sell the shares, the proceed is credited into the brokers account,” he said.
Meanwhile, the SEC DG disclosed that the commission would stratify licences for various exchanges.
“What we have today are unified requirements for companies to set up an exchange now the stratification will lessen the requirement. For instance, if you want to set up an exchange under tier 2, the requirement will be lesser than that of tier 1 and if you want to set up under tier 3, the requirement will also be light and the kind of company that also be listed will be lesser than the other one. We think it will draw some of these small and medium scale enterprises to be listed because over the last 20 to 25 years, we have not seen any much progress in the second tier securities market,” Gwarzo said.