Unclaimed dividends now N170b
Efforts by the Securities and Exchange Commission (SEC) to tackle the rising unclaimed dividends in the nation’s capital market have continued to hit the brick wall as the commission announced that the figure has risen to N170 billion as at December 2020 from N158.4 billion recorded in 2019.
As little as over N2 billion in 1999, the figure rose sharply to N158.4 billion as at the end of 2019, representing an increase of 32 per cent from N120 billion recorded in 2018.
At a Virtual Capital Market Committee Meeting held in Lagos, yesterday, the Director General of the SEC, Lamido Yuguda, linked the rising figure to irregularities in identity management and multiple subscriptions from investors.
Yuguda expressed dissatisfaction over the development, assuring that the SEC would adopt all-inclusive approaches to stem the tide and boost investors’ confidence.
He disclosed that the commission has already constituted a committee on identity management expected to harmonise various databases of investors and facilitate data accuracy in the market.
According to him, the outcome of the committee’s assignment would address the challenges of identity management and help tackle some of the issues of unclaimed dividends, direct cash settlement and multiple subscription.
“There is a problem with the e-dividend process and there is also problem with us too as people because if you are buying securities using your own wealth, why will you use another persons name? Why will you use a name that will not be traceable to you? This became an issue after the introduction of Biometric Verification Number (BVM) because BVN is tied only to one name,” Yuguda said.
On the Electronic Dividend Mandate Management System (e-DMMS) portal, Yuguda said the total number of mandated and approved accounts from its inception in 2016 to July 2021 stood at 1,144,970.
He explained that the COVID-19 pandemic affected the registration exercise. Yuguda said members of the CMC had adopted some measures to increase the number of mandated investors on the e-DMMS and reduce the quantum of unclaimed dividends in the market.
He listed the measures as automation for mandating to e-DMMS, increased monitoring of adherence to procedures and increased awareness campaigns on the initiative.
Yuguda added that a training session would be organised by the Central Securities Clearing System (CSCS); to be supported by the e-DMMS technical committee, Institute of Capital Market Registrars (ICMR) and Association of Securities Dealing Houses of Nigeria.
He said a study to determine the suitability of the CSCS to process dividends of investors in unlisted companies would also be conducted.
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