SEC to end issuance of e-dividend warrant by June 2017 in bid to stem high rate of unclaimed dividends

Posted by News Express | 11 August 2016 | 2,393 times

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The Securities and Exchange Commission (SEC), has directed all registrars operating in the Nigerian capital market to end the issuance of e-dividend warrant to investors by June 31, 2017.

This, according to the commission, will compel retail investors to embrace the exercise and stem the rising unclaimed dividend in the capital market, which is currently put at N80 billion.
E-dividend is an electronic dividend payment which will enable an investor’s account to be credited after 24 hours that dividend is paid.
The Director General of SEC, Mounir Gwarzo, while addressing journalists during the post Capital Market Committee (CMC), second quarter press briefing, held in Lagos yesterday, bemoaned the low level of patronage on e dividend registration in the market, noting that only 6,000 investors have accessed the platform.
To encourage more participation in the exercise, the SEC boss explained that the CMC has agreed that all banks should appoint an e-dividend champion that would interface with retail investors to ensure a seamless registration.
According to him, the e dividend champions would forward all issues associated with the registration to Nigerian Interbank Settlement System (NIBSS), to give clarifications on the issues within three days.
He added that the SEC has also extended the write off period for free registration process from September 14th to December 31, 2017 to enable more investors to partake on the exercise.
“With all efforts to encourage participation on e dividend, only 6,000 retail investors have registered and this is not encouraging.
“People are frustrated with the misunderstanding between the banks and registration and at the meeting, we agreed that banks should appoint e dividend champion to handle the operations of each bank on the registration.
“We also agreed that henceforth, by the end of June 31st 2017, no registrar will issue e dividend warrant to any investor to enable them embrace the exercise.”
On the new capital requirement for Capital Market Operators (CMOs), he said that the Commission’s December 31, 2016 final deadline would not be extended.
He said that the Commission would continue to clear any operator that meet with the recapitalisation exercise till December 31, 2016.
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 ones on suspension.
According to him, the licence of any operator that fails to meet up with the requirement will be cancelled after December 31, 2016.
He stated that any operator that failed to meet up with the recapitalisation exercise would seek for new licence at the expiration of the deadline if the operator wished to remain in the market.
•Sourced from The Guardian. Photo shows SEC DG Mounir Gwarzo.

Source: News Express

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