The Securities and Exchange Commission (SEC) on Wednesday directed registrars operating in the Nigerian stock market to stop issuance of dividend warrants as from 2017 to stem rising growth of unclaimed dividends.
Mr Mounir Gwarzo, SEC Director-General, gave the directive at the commission’s Capital Market Committee (CMC) second quarter media briefing in Lagos.
Gwarzo said, “From June 30, 2017 no registrar will issue dividend warrants again in the market to compel people to register for e-dividends registration mandate.”
He said that the effort was geared at reducing the spate of unclaimed dividends in the market and to encourage investors to key into e-dividend payment platform.
Gwarzo said that only 6,000 Nigerians had registered for e-dividend payment mandate launched by the commission, the Central Bank of Nigeria and the Nigeria Inter-Bank Settlement System (NIBSS) in July.
He said that the aim of e-dividend was to eradicate the difficulty being encountered by retail investors in claiming their dividends.
Gwarzo said that the commission would also continue to partner with the stakeholders to ensure that all retail investors embrace the e-dividend platform.
He said the CMC had resolved that every bank and registrar would appoint an e-dividend champion that would interface with investors to settle issues arising from e-dividend registration process.
Gwarzo said that the e-dividend champions would work closely with NIBSS to ensure that challenges arising from the e-dividend were settled within three to four days.
He said that the commission had also extended the write-off of e-dividend registration fee to Dec. 31 to encourage investors to embrace the initiative.
Gwarzo added that the commission would continue with its enlightenment programme to ensure full participation of all investors.
The SEC director-general said that the e-dividend payment platform would ensure prompt payment of dividends into investors’ accounts.
He described the e-dividend platform as a game changer in the market to ensure reduction of infractions to the barest minimum.
On the new requirement for Capital Market Operators (CMOs), he said that the commission’s Dec. 31 final deadline would not be extended.
He said the commission would continue to clear any operator that meet with the recapitalisation exercise by Dec. 31.
Gwarzo said that the commission would withdraw the licence of any CMO that failed to meet up with the requirement at the expiration of the deadline, be it a dormant CMO or the one on suspension.
According to him, the licence of any operator that fails to meet up with the requirement will be cancelled after Dec. 31.
Also speaking, Dr David Ogogo, the Registrar/ Chief Executive Officer, Institute of Capital Market Registrars (ICMR), urged all capital market operators (CMOs) to register for the e-dividend mandate.
Ogogo said that e-dividend mandate, dematerialisation and direct settlement payment initiatives introduced in the market were all geared toward ensuring a seamless market.