The Securities and Exchange Commission, SEC, has called on investors to come up with sufficient proof of ownership so as to be allowed to regularize their accounts into one as the agency steps up efforts to reduce the growing quantum of unclaimed dividends in the market.
The Acting Director General of the SEC, Ms Mary Uduk gave the advise at a One day National Seminar on reducing incidence of unclaimed Dividends held in Ibadan.
Uduk who was representing by Mr Stephen Falomo, the Director, Lagos Zonal Office of SEC, said there were enormous benefits for multiple accounts regularisation and e-dividends registration for investors.
Uduk disclosed that the Capital Market Community has opened a forbearance window to allow investors with multiple subscriptions/applications to public offers to regularize these subscriptions under a single account name.
“Investors who provide sufficient proof of ownership will be permitted to regularize their accounts into one. The forbearance window closes on December 31, 2019.
She lamented that Continuous retention of dividends by Companies has a great potential of distorting the true financial position of Companies and misleading investors and other members of the public.
“The huge amount of unclaimed dividends could discourage foreign investment as well as discourage members of the public from staking their funds in the market.
“Non-receipt of dividends discourages investors in stock market and encourages them to search for alternative investment outlets such as the real sector and money market. Consequently, Public Companies are denied the opportunity of cheaper source of finance.
Uduk further disclosed that e-Dividend (otherwise known as Electronic Dividend) is a secure on-line means of paying dividends directly to the Shareholder’s account instead of printing and mailing dividend warrants, as was the case before now.
“It entails a shareholder who has a bank account (Savings or Current Account) with any bank, to give his/her accurate account details, including Biometric Verification Number (BVN), to the Registrar of the Company and his/her dividend would be paid directly into that account.
“Each investor is required to enroll for the e-dividend regime by completing an e-Dividend ‘Mandate Form’ and submitting same at the nearest branch of his/her Bank or Registrar’s office, for identity validation leveraging the BVN platform of the NIBSS. Successfully BVN validated mandates are approved and passed to Registrars for dividend payment.” She added
In his remarks, Mr Eric Akinduro, the Chairman of Ibadan Zone of Shareholders’ Association, urged the SEC to intensify efforts at enticing investors to embrace the e-dividends registration.
“SEC must intensify activities to entice investors to embrace the e-dividends registration for the volume of unclaimed dividends to reduce within the shortest time frame.
“I want to appeal to the SEC that Multiple account regulariation which was extended to December 2019 should be an on-going process; for many accounts are under processing, particularly deceased shareholders.
“Standardisation of registrars operations should be introduced, across board,” Akinduro added.
In his keynote address, Mr Adewale Raji, Group Managing Director, Odu’A Investment Company Limited and the chairman at the event, charged the association to take the lead in ensuring its members were duly registered.
“In order for us to reap maximum benefits from the e-dividends mandate, I want to urge the association to take on board this unique opportunity.
“As a matter of responsibility, we need to encourage members to take advantage of this opportunity.
“At the Zonal or State level meeting, we need to put in place a proper process whereby we enlist people who respond and see them through the process of e-dividends registration and also address other issues relating to accessing dividends,” Raji said.