SEC to interface with FIRS on stamp duty, others
Investors to receive dividends in 24hrs
The Securities and Exchange Commission (SEC) has disclosed plans to include members of the Federal Inland Revenue Services (FIRS) in the Capital Market Masterplan Implementation Committee (CAMIC) to enable them brainstorm on issues concerning stamp duty in the nation’s capital market and how it can be waived to attract more retail participation.
Besides, for the first time in the history of the capital market, investors can receive their divided within 24 hours through the e-dividend payment platform.
Indeed, with the current downturn in Nigerian Capital market which has caused market capitalisation to decline by 17.36 per cent in 2015 and 15.52 per cent lost year-to-date as at February 10, 2016, the SEC has intensified efforts, aimed at increasing local investors’ participation in the market to enhance sustainable growth.
The Nigerian capital market which declined by 17.36 per cent in 2015, also has recorded 15.52 per cent lost year-to-date as at February 10, 2016.
Speaking at a town hall meeting to sensitise the investing public on the e-Dividend platform held in Lagos at the weekend, the Director General of SEC, Mounir Gwarzo who stated that the commission was poised to ensure that the local investors dominate in the nation’s capital market, explained that it has also created robust e-dividend technology platform that would enable the market to achieve T+1(one day transaction settlement) settlement system in the nation’s capital market.
He noted that these initiatives are implemented by the commission as part of its 10 year Capital Market Master Plan to restore retail investors’ confidence and deepen the market.
“We have achieved something that is very unique, even South Africa they have t+5, where you do transactions and payment will not be made until five days. But with this e- dividend system, we are going to achieve t+1 settlement system. You sell shares by today, payment are effected within 24 hours which is going to be the first capital Market in Africa to achieve that feat. No market in Africa has experienced that before and we are determined to ensure that it is achieved here.
“For the stamp duties, we are looking at bringing the FIRS in as members of the CAMIC to discuss the duties and how they can be waived so that retail investors will benefit.
“Our major strategy is to target the retail investor and the only way we can deepen the market and ensure that the market is within our own grip is to ensure that the retail investor comes into the market.
“It is only the domestic investor that no matter the condition of the market will stay with us, what we have been experiencing in the market is the dominance of the foreign investor where anytime they want to exit the market they get out and anything they want to come in they do so. Seeing what happens in the market, we decided that the best thing it to get the retail back to the market,” he added.
On the e-Dividend platform, Gwarzo explained that the platform would automatically allow dividends to be credited directly into shareholders’ accounts within 24 hours of payment by the company.
“Our approach is to identify why these retail investors are not in the market and deal with such issues. Their major complain is about not getting dividend and for us to address some of these issues, we have to embark on road show where we meet the retail investors one on one and tell them why they needed to be part of the e-dividend. It has been quite successful so far.
The SEC boss assured that once the e-dividend platform is fully operational the issue of stale warrant will be of the past, the issue of travelling from one place to another to deposit the warrant will be a thing of the past; the issue of change of address will also be eliminated.
“The issue of unclaimed dividend which according to our records is in excess of N80billion will also be a thing of the past. These unclaimed dividends came about from dividends of small stakeholders like you and me and we need to ensure that they are claimed.
“The era of proceeds not being remitted for shares sold will be a thing of the past. The e-dividend platform with the use of BVM has settled that. Once we register for e-dividend, we will also benefit from the Direct Cash Settlement. Another advantage of the e-dividend is that it will provide a very robust KYC to the operator.
“It is because of lack of KYC that we find a lot of infractions in this market. With the BVN platform which the e-dividend is leveraging on, the KYC will now be very robust. People will not be able to use all sorts of identifications to claim what does not belong to them.”
Gwarzo emphasised that the only way to attract retail investors back to the market is to ensure that concrete steps are taken to adequately address their concerns, adding that the BVN platform that would connect to the e-Dividend will also enable SEC to implement other initiatives in the market.
“For instance, with the BVN platform, everyone that operates in this market as an investor will have his data within this system,” he added.
so if anyone wants to defraud in this market, it cannot be done.
“People cannot impersonate others as the platform will expose them. We have no other place to invest our little funds than in our market and that is why we are trying to cultivate your appetite and the only way to do that is to address some of these issues to move the market forward,” he added.