Dividend Warrants: Stakeholders Call for More Enlightenment

By Goddy Egene

As stakeholders in the capital market savour the decision by the Securities and Exchange Commission (SEC) to extend the deadline for discontinuation of issuance of physical dividend warrants from June 30 to December 31, the regulators have been urged to intensify awareness to get more investors on to the electronic-dividend (e-dividend) platform.

SEC had given the June 30 deadline, saying all dividends would be electronically issued to shareholders through their bank accounts as from July 1, 2017. However, the commission had moved the deadline to December 31, 2017, citing numerous requests for its extension from the investing public.

“This will mark the end of conventional issue of physical dividend warrants to shareholders of public companies in the Nigerian capital market. Furthermore, in a bid to curb the growth of unclaimed dividend in the capital market, the Commission will continue to underwrite the cost of e-Dividend enrolment till December 31, 2017. So far, about 2,200,000 investors have mandated their accounts through the e-dividend platform,” SEC said.

While stakeholders commended the commission for the extension and undertaking to continue to fund the cost of e-dividend enrolment, they said in order to derive the maximum benefit, intensified enlightenment campaign should be carried out by the regulator.

The Chairman of Ibadan Zone Shareholders Association, Mr. Eric Akinduro, said: “The extension is a very good and welcome development particularly considering the number of shareholders that we have in this country. However, the extension alone is not   enough. SEC should embark on intensive awareness creation particularly to the grassroots investors.  In this market we have two types of investors informed and uninformed SEC should create an enabling environment for the uninformed to be informed and key into the e-mandate system.”

According to him, the commission should partner shareholders groups to reach their members at grass root level.

Mr. Anthony Omojola of Independent Shareholders Association of Nigeria (ISAN) said the regulator should embark on an enlightenment using radio, town hall meetings and other means across the country.

“This can be done through partnership and collaboration with other market stakeholders. If the enlightenment is not intensified, the extension will not lead to a significant benefit. Apart from shareholders, most banks’ staff needs enlightenment too because many of them do not understand the workings of the e-dividend platform. They show high level of ignorance when an investors want to register,” Omojola said.

Speaking in the same vein, Mr. Oderinde Taiwo of Proactive Shareholders Association of Nigeria, said: “In addition to the extension, there should be publicity in the country’s three major languages on the radio and television before the new deadline expires.”

Mrs. Bisi Bakare of Pragmatic Shareholders of Nigeria said that there should be more enlightenment, especially in the rural areas.

“Before now, most investors were civil servants, who have retired to their villages or changed addresses. The regulator should collaborate with other stakeholders and do more enlightenment for a more efficient result,” Bakare said.