Unclaimed Dividend Starving Economy Of Liquidity, Says SEC

The Securities & Exchange Commission (SEC), on Wednesday noted the need for all stakeholders to tackle the unclaimed dividend menace headlong, given the fact that it starves the economy of funds.
Speaking at a Town Hall meeting on Current Initiatives by the SEC Nigeria to enhance investor value in Port Harcourt, Rivers State, Acting Director General of the Securities and Exchange Commission (SEC), Ms. Mary Uduk said “unclaimed dividend is an undesirable feature of the Nigerian capital market which denies investors/shareholders the gains of participating in the capital market.

“It denies the economy access to the huge amount of money which should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy.
“It is a consequence of the bottlenecks which are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others.
The renewed focus on unclaimed dividend menace follows a recent news report that its level has risen to N129.62bn, its highest level, three years since the launch of the E-Dividend Mandate Management System (E-DMMS) by the SEC in November 2015.

The E-DMMS is an E-dividend payment portal expected to eradicate or reduce to the barest minimum the incidence of unclaimed dividend, by ensuring payment of dividends directly into a shareholder’s account was in collaboration with the Central Bank of Nigeria (CBN), Nigerian Interbank Settlement System (NIBSS), among others.
With the E-DMMS, SEC cancelled the issuance of physical dividend warrants, opting for full e-dividend payment for companies quoted on the stock market.

Uduk told participants at Wednesday’s meeting that SEC is currently leading the entire capital market industry in an effort to migrate all shareholders to an e-Dividend regime. The regime, she stressed, ensures that dividends not exceeding 12 years of issue are credited directly to an investors account after declaration by the paying company and within a stipulated payment period through simple interbank transfer.

She also urged Nigerians to desist from participating in investments that offer unreasonable levels of returns, or propose return levels that are unreasonably high at little risk.
Such fund managers and the products they offer should be cross-checked to ensure that such are registered with the commission, she stressed, explaining that the meeting is specifically to keep Nigerians abreast of the initiatives that SEC is currently undertaking. All of these, Uduk added, is to make the capital market more user friendly such that people can participate in it with greater ease, comfort and convenience.

Continuing, she stressed: “There is the added and all-important purpose of ensuring that the gains of your participation, be these dividends, proceeds from share sales/transfers, etc. accrue to you seamlessly, without sweat and in the shortest time possible. The purpose is also to ensure that you do not fall victim to the antics of fraudsters who purport to be able to double any amount of money you make available to them as investment value.
“These fraudsters or promoters of Ponzi Schemes are the false prophets of the investment environment, they are the ill wind that blows no good and at whose sight you must flee; they are to be avoided. This is one message you must take home to family, friends, relations and acquaintances in order to save them from the agony of loss of their hard–earned money” she stated.

Such other initiatives by the commission, according to Uduk, included: Direct Cash Settlement, dematerialisation, National Investor Protection Fund, Recapitalisation of capital market operators, corporate governance scorecard, new rules for products innovation, development of commodity exchange, Collective Investment Schemes among others.
Speaking at the forum, Head of Port Harcourt Zonal office of SEC, Obi Adindu said the commission is interested in making the capital market stronger and better and a means of creating wealth for Nigerians.
“We are here to get your views on our initiatives and policies so that we can fine tune them where necessary in a bid to ensure that your investments are well protected in the capital market” Adindu added.

Photo Caption: From left, Director General Port Harcourt Chamber of Commerce,Industry Mines and Agriculture (PHCCIMA), Erasmus Chukunda looks on, while Ms. Uduk engages Assistant Commissioner Administration, Nigeria Police Force, Victor Erivwode in a chat at the Town Hall Meeting in Port Harcourt on Wednesday.

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