Nigeria's SEC To Grant Shareholders Easy Access To Unclaimed Dividends Via New Rules

Nigeria's Securities and Exchange Commission (SEC) in a proposed new rule is seeking to ensure that shareholders of listed companies have easy access to their outstanding dividends once their validated bank accounts for e-dividend payment get to the registrars of the firms.
"Registrars shall ensure that all mandated shareholde

r accounts are credited with all outstanding unclaimed dividends within 2 days," the market regulator said in an exposure of new rules published on its website.
According to the market regulator, the new rule when enacted will increase the rate of compliance by registrars and help to reduce the quantum of unclaimed dividends.
Nigeria currently has over 100 billion naira in unclaimed dividends while investigations have shown that the problems of unclaimed dividends were largely caused by companies in collaboration with their registrars to exploits the weak market regulations and rules.
Also, in its bid to monitor and ensure compliance with its rules, SEC proposed to mandate registrars to forward status reports on all mandated shareholders accounts on a quarterly basis.
This, according to the new rule being proposed is to enable SEC monitor the level of compliance with the E-Dividend Mandate Management System.
The Commission said registrars should ensure that one any shareholder is able to provide his/her BVN, the requirement for bankers’ confirmation shall not be required before shareholders’ accounts are mandated by the registrars. The objective of this provision, SEC says was to avoid unnecessary delay in mandating shareholders’ accounts.
The Commission warned that any Registrar that violates the provisions of these Rules shall be liable to a penalty of not less than One million naira and an additional sum of 20, 000 naira for every day the violation persists.
At the last count, there were more than 2.55 million mandated accounts under the eDMMS. However, there have been several complaints of registrars not remitting the backlog of unclaimed dividends and in many instances, shareholders have to launch a new separate recovery process to reclaim previous payments.
Also, as part of efforts to ensure that shareholders and their heirs receive the benefit of their investments at the stock market, SEC is reviewing rules and regulations for the transfer of shares of a deceased person to the beneficiaries or administrators.
Under the new rules, registrars shall ensure that shares of a deceased are transmitted within three weeks of receiving the request from the administrators or executors.
The executors or administrators shall, however, provide a letter of introduction from the administrators and executors, introducing themselves as the legal representatives of the estate. The letter should indicate the names, addresses, signatures, and BVNs of the individual administrators and executors.
Also, administrators or executors shall provide original death certificate from the National Population Commission (NPC) for sighting, original probate letter or letter of administration for sighting or the certified true copy (CTC) from a Notary Public, copy of newspaper advert placed by the Court or Gazette, any evidence of ownership of the investment by the deceased such as the statement of shareholding from the Central Securities Clearing System (CSCS), original share certificates, dividend stub or dividend warrants or bank statement showing receipt of dividend into the account of the deceased.