SEC adopts new measure to tackle unclaimed dividend
• Reduces costs, time for transmission of deceased shares
• Registrars risk paying over N1million for infringement
To further slash the quantum of unclaimed dividend in the capital market to the barest minimum, the Securities and Exchange Commission (SEC), Wednesday, reduced the time, processing, and cost of transmission of shares from a deceased to the beneficiary from initial three weeks to one week.
The Commission believes the move will ensure seamless transmission and claim of a deceased’s shares by heirs and administrators, and ultimately encourage beneficiaries of deceased investors to step up efforts to claim such dividend.
The Acting Director-General, SEC, Ms Mary Uduk, while speaking recently in an enlightenment programme by the Lagos State Probate Registry, in Lagos, cited the deceased as one category of investors whose investment yields have contributed to the growth of unclaimed dividend.
She noted that the beneficiaries of these sums as indicated in the will or letter of administration were yet to claim the investments and accrued dividend through the share transmission process.
With the new development, registrars are expected to ensure that shares of a deceased are transmitted within a week of receiving the request from the administrators or executors.
The registrar is also required to transmit the Letter of Administration to the Probate Registry within 24 hours of receipt of same for verification.
“The administrators/executors are however required to provide letter of Introduction introducing themselves as the legal representatives of the Estate. The letter should also indicate the names, addresses, signatures and BVNs of the individual Administrators /Executors.
“Also required are 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.
“Others are copy of newspaper advert placed by the Court or Gazette, any evidence of ownership of the investment i.e. CSCS statement(s) of the deceased, original share certificates, dividend stub or dividend warrants or bank statement(s) showing receipt of dividend(s) into the account(s) of the deceased.
“Where the Administrator/Executor cannot provide these requirements, the Registrar may require confirmation through insurance, indemnity or interview the SEC stated. The fees chargeable for transmission of shares by registrars is being limited to one per cent of the total value, and additional five per cent Value Added Tax (VAT) for shares of N5 million and below, and 0.5 per cent of the value and five per cent VAT on shares above N5 million with a maximum chargeable amount of N200,000, excluding VAT.”
SEC noted that fees chargeable for confirmation of probate or letter of administration shall not exceed N12,000, while registrars are also disallowed from charging a fee on dematerialisation of share certificate and mandating of accounts for electronic dividend.
“However, change of address, name or mandate shall not attract more than N100 per request, while update of signature capture and scanning shall not be more than N200 per signature.”
Furthermore, the Commission warned that any registrar that violates the provisions of the rules shall be liable to a penalty of not less than N1 million, and an additional sum of N20,000 for every day the violation persists.
The new rules also seek to standardise the turnaround time for processing all requests for replacement and update from the date of submission of all relevant documentations. The turnaround time for dematerialisation is three working days, update of signature capture and scanning shall take place in 24 hours, while change of address, name and mandate shall be done within two working days.
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