SEC Considers New Date to Stop Dividend Warrants Issuance

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Goddy Egene

There is an indication that the Securities and Exchange Commission (SEC) may suspend its plan to stop issuance of dividend warrants as from June 30. This, THISDAY gathered, was sequel to calls by stakeholders in the capital market that the plan be put hold on hold.

As part of efforts to reduce unclaimed dividends in the market, the SEC, in collaboration with the Central Bank of Nigeria (CBN) and Nigerian Inter-Bank Settlement System (NIBSS) launched Electronic Mandate Management System (E-DMMS) platform in 2015.

The platform facilitates the registration for electronic dividend by shareholders. The commission, thereafter, said from July 1, 2017, dividend warrants would not be issued by Registrars to shareholders, saying investors should registrar for e-dividends.
But few days to the deadline, THISDAY gathered that the capital market apex regulator is considering moving the deadline.

“Following calls by shareholders and other stakeholders, the need to ensure more investors key into the e-dividend and the compassionate disposition of the commission, it is very likely that shareholders will continue to receive dividend warrants after June 30, 2017. SEC is consulting and will announce a new deadline,” a capital market source told THISDAY.

Some shareholders had said that while the e-dividend was a good means of reducing unclaimed dividends in the market, most investors were yet to key into the platform. They therefore said stopping dividend warrants would mean locking out many investors.

For instance, the Chairman of Ibadan Zone Shareholders Association, Mr. Eric Akinduro, said: SEC has done well by creating a platform where investors can check their non-mandate account with registrars and which many of them have embraced.

“However the deadline is what I fault due to the level of illiteracy of both investors and even the banks. SEC needs to do a lot of enlightenment at grass root level for the small investors that are the major owners of this unclaimed dividends to know how to do about it….So SEC should not close the platform because unclaimed dividend is a continuous issue that cannot stop over a period of time. How many small Investors have access to internet and computer to check this but with time information will go round and more people will get it done,” Akinduro said.
Also, another stakeholder, Mrs. Bisi Bakare said stopping issuance of dividend warrants would not solve the problem.

“In as much as I am in total support of e-dividend, it is not matured now to completely stop the issuance of dividend warrants. Before that should be done, we need to do more of enlightenment, especially in the rural areas. Before now, most investors were civil servants, who have retired to their villages or changed addresses. Most of them do not have access to mass media to key into the E-DMMS that SEC has introduced. We need to go down to the rural areas to enlightened them. If SEC goes ahead to implement its decision, many of the investors would remain locked out and this would have defeated the objective. The regulator should collaborate with other stakeholders and do more enlightenment for a more efficient result,” Bakare said.