The Director-General of the Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, has said the commission is renewing its commitment towards tackling the issue of unclaimed dividends in the nation’s capital market.
Speaking at the first post Capital Market Committee(CMC) news briefing organised by the commission virtually at the weekend, Yuguda said the commission would be working more with all capital market stakeholders to find a solution to unclaimed dividends, valued at N158.44 billion as at December 2019.
Specifically, he said SEC would work with the registrars, stockbrokers and the Central Securities Clearing System to resolve the issue of unclaimed dividends in the market.
According to him, they are looking at the problem in two-fold, by reducing the existing stock of unclaimed dividends and preventing them from accumulating further.
He said: “We have the e-dividend mandate at the moment, which should substantially take care of the accumulation of new unclaimed dividends in the future. I know this is not working exactly perfectly, but it has substantially reduced the accumulation of new unclaimed dividends. The task now is to work with the registrars to make it easy for shareholders to be unbundled unto the system. I know there are complaints in the market that some shareholders are finding it a little difficult or some registrars are not working quickly to get people unbundled.”
The SEC boss noted that some of these existing stock of unclaimed dividends had already been returned to the companies in line with the law, adding that, a little percentage was still with the registrars.
“These are issues we are also looking at and we will come out to the market very soon with a statement about it,” he said.
Yuguda said going forward, the commission would simplify transactions in the capital market to attract more investors, explaining that the mode of transactions had been complicated due to the number of processes to invest in the market.
“From the point of parting with your money to the point of getting the money in form of dividend or as proceeds from the sale of stocks bought, the process is extremely complicated. For many people, that complication is a long tunnel because they do not want to go through that process and you will agree with me that along that line, a lot of things happen. “For example, people part away with their money and never get any shares, while others get shares but the shares become worthless at some point and so there are a lot of things that we need to do to simplify transactions in the capital market.
“The process of capital market investment is extremely complicated for many people that complication is a put off because they don’t really want to go through that process,” he said.
Yuguda added that the commission was also working to close the loopholes in the market to protect investors from falling victims to certain operators who capitalise on the holes to defraud investors.
“We will continue to work to attract investors by making sure the market is a fair playing field; by ensuring that instruments traded in the market are fairly valued and in the end investors will make profit by having their money in the market.
“For issuers, we will make sure that benefits of listing and issuing in the market far outweighs walking to a bank to borrow money,” he said.