May 8, 2021
  • May 8, 2021

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SEC decries registrars role in frustrating e-dividend process

The Director-General of the Securities and Exchange Commission (SEC), Lamido Yuguda, has said that some capital market operators (CMO) are frustrating the electronic-dividend (e-dividend) mandate process and has vowed to sanction such operators.

“The commission has observed that certain Capital Market Operators (CMOs) frustrate the e-dividend mandate process.

"We have observed that the growth in the number of mandated accounts has been on the decline for some time.

"The capital market community has directed its e-Dividend Committee to engage with the Committee of Heads of Banking Operations to encourage better cooperation from banks as we tackle the challenges of unclaimed dividends,” Yuguda said at the briefing after the first CMC virtual meeting.

According to him, as the commission works towards resolving legacy issues with unclaimed dividends, all stakeholders should comply with all directives of the commission as defaulters would be sanctioned appropriately.

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“There is no reason why there will be unclaimed dividends for new investors or newly-listed companies adding every investor should be promptly paid his/her dividends upon declaration and payment,” he said.

The e-dividend is the conversion of physical dividend warrants to electronic form through direct payment into a shareholder’s bank account.

It was introduced to check the rising unclaimed dividends in the market and encourage more patronage by investors. But the rate of investors’ enrollment in the e-dividend mandate has been very slow.

On the growth of fintech in the country, the commission chief said SEC would continue to engage players in the fintech space and support them to operate lawfully so as to ensure the delivery of safe products and services without stifling innovation.

“The commission recognises the impact of fintech on capital market activities and wishes to assure the public that we remain accommodative of this development.

"We shall continue to engage players and support them to operate lawfully. Our aim is to ensure the delivery of safe products and services without stifling innovation, I, therefore, encourage fintech firms to approach the Commission for due registration and desist from operating illegally,” he said.

The DG disclosed that the Commission is also mindful of developments in the crypto asset space, disclosing that they were in discussions with the Central Bank of Nigeria (CBN) on how to better understand and regulate the market given the need to take advantage of the emerging innovations while protecting investors and the financial system.