SEC Boss Accuses Operators of Frustrating e-Dividend Mandate Process

Goddy Egene

The Director-General of the Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, has said some capital market operators (CMO) are frustrating the electronic-dividend(e-dividend) mandate process and has vowed to sanction such operators.

The e-dividend is the conversion of physical dividend warrants to electronic form through direct payment into a shareholder’s bank account. It was introduced to check the rising unclaimed dividends in the market and encourage more patronage by investors. But the rate of investors’ registration the e-dividend mandate has been very slow.

Speaking during a post Capital Market Committee (CMC) press briefing held via an online platform yesterday, Yuguda said:“The commission has observed that certain Capital Market Operators (CMOs) frustrate the e-dividend mandate process. We have observed that the growth in the number of mandated accounts has been on the decline for some time. The capital market community has directed its e-Dividend Committee to engage with the Committee of Heads of Banking Operations to encourage better cooperation from banks as we tackle the challenges of unclaimed dividends.”

According to him, as the commission works towards resolving legacy issues with unclaimed dividends, all stakeholders should comply with all directives of the commission as defaulters would be sanctioned appropriately.

“There is no reason why there will be unclaimed dividends for new investors or newly-listed companies adding every investor should be promptly paid his/her dividends upon declaration and payment,” he said.

The SEC boss said the commission would continue to engage players in the fintech space and support them to operate lawfully so as to ensure the delivery of safe products and services without stifling innovation.

“The commission recognises the impact of fintechs on capital market activities, and wishes to assure the public that we remain accommodative of this development. We shall continue to engage players and support them to operate lawfully. Our aim is to ensure the delivery of safe products and services without stifling innovation, I therefore encourage fintech firms to approach the Commission for due registration and desist from operating illegally,” he said.

The DG disclosed that the Commission is also mindful of developments in the crypto asset space, disclosing that they were in discussions with the Central Bank of Nigeria (CBN) on how to better understand and regulate the market given the need to take advantage of the emerging innovations while protecting investors and the financial system.