SEC Reduces Cost, Timeline For Transmission Of Deceased’s Shares To Beneficiaries

The Securities and Exchange Commission (SEC), on Wednesday announced a reduction in the time, processes and costs of transmitting shares from deceased investors to their beneficiaries.
This, the commission hopes in a statement, will further reduce the mountain of unclaimed dividends in the Nigerian capital market, while encouraging such beneficiary investors to intensify efforts at claiming such dividends.

According to an amended draft on the operating framework for the transmission of shares, the SEC said the timeline for transmission of deceased’s shares by registrars is now one week of receiving the request from the administrators or executors, from the previous three weeks.
Continuing, the statement said “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 a 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.”

The statement also listed other requirements as 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.

The administrators or executors are also to present a copy of newspaper advert placed by the court or Gazette, any evidence of ownership of the investment (such as Central Securities Clearing System statement) 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.

Fees chargeable for transmission of shares by registrars is now also “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. Also, fees chargeable for confirmation of probate or letter of administration shall not exceed N12,000.”

The commission also forbids registrars from charging a fee on dematerialisation of share certificate and mandating of accounts for electronic dividend, while a change of address, name or mandate shall not attract more than N100 per request. Also, an update of signature capture and scanning shall not be more than N200 per signature, warning that violation of the rules shall attract 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 documentation. The turnaround time for dematerialisation is three working days, an update of signature capture and scanning shall take place in 24 hours while a change of address, name and mandate shall be done within two working days.

According to the SEC, the amended draft rules would ensure standardisation and efficiency in the transmission process, thereby minimising conflict, protecting investors and maintaining the integrity of the market.

Recall that the Acting Director-General of the commission, Ms. Mary Uduk recently urged beneficiaries of deceased investors to step up efforts to claim such dividends
Uduk stated that one category of investors whose investment yields had contributed to the growth of unclaimed dividends in the capital market are deceased investors.

https://investdata.com.ng/2019/07/sec-reduces-cost-timelines-for-transmission-of-deceaseds-shares-to-beneficiaries/