SEC orders payment of unpaid e-Dividends to shareholders

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The Securities and Exchange Commission (SEC) has ordered registrars in the capital market to pay outstanding and unclaimed dividends to shareholders.

Speaking at the Investors Clinic Program in Lagos, Director of Market Development, SEC, Henry Rowland, told the Registrars in the capital market to pay outstanding e-dividends to shareholders.

“What the forum wants is pay us dividends, and the dividends must be paid no matter the challenges,” Rowland said.

Reacting to the order by SEC, Managing Director, Africa Prudential Plc (formerly UBA Registrars Ltd), Peter Ashade, said, “We can assure you that all backlog of e-dividends will be paid. We are working assiduously on where we are not getting it right to get it.”

In a bid to reduce the numbers of unclaimed dividends, SEC noted the importance of a portal where stockbrokers would be able to initiate e-mandate request form for their clients as against shareholders going to either their banks or registrars.

One of the keynote speakers at the Investors Clinic, Chief Executive Officer, United Securities Limited, Seyi Owoturo, delivered a note on full dematerialization of e-dividends, its benefit to capital market participants, and how money has been dematerialized through electronic banking.

He said: “Money has been partially dematerialized because now I can send money to you and I don’t have to give cash. I can transact business with you and we can exchange values without sending cash. I can move money from my internet platform to give you cash. Now, the only time I can use money is when am in the market to buy oranges.

“And you begin to wonder why shares shouldn’t be dematerialized, if money has been dematerialized. “

He further said that the use of paperwork and paper certificate in the hands of investors are no longer relevant, being a custodian or a trustee who holds securities as third party investor is also a benefit of dematerialization of e-dividends.

“If am a custodian or trustee, I don’t have to hold paper certificate because I don’t have to secure those paper certificates. Full dematerialization provides a safe and convenient way for holding column,” Owoturo said.

Kenneth Nwafor, Operations Manager, Market operations at the Nigerian Stock Exchange (NSE) also gave an insight into the direct cash settlement in the Nigerian capital market.

“Direct Cash Settlement is an initiative that came around February 2016 and a lot has go in through efforts by various stakeholders across the capital market to bring to where it is today. It is a process where trade executed for investors are settled directly into an account that they have forwarded to their brokers,” he said.


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