SEC, CBN push for e-dividend payments

As part of efforts to address the issue of unclaimed dividends and encourage patronage of the market, the Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN) and other stakeholders in the financial system are coming together to facilitate the electronic dividend (e-dividend) payment for shareholders.

The e-dividend was introduced by SEC to make direct payments of dividends into investors’ accounts. But shareholders have not embraced it as expected due to some challenges involved in the process of obtaining e-dividend mandate forms.

It was gathered that the regulators put together a market wide technical committee, which has come up with a platform that will make it easy to register for e-dividend payment.

The subcommittee reportedly worked with Central Securities Clearing System (CSCS) and Nigerian Interbank Settlement System (NIBSS) and came out with modalities to create a portal where all e-dividend mandate form can be generated, filled and submitted online.

A source close to the committee said on Monday, that “The major issue of the e-dividend is data gathering. The portal will enable the gathering of the data of shareholders submitted by the shareholders themselves online. Once the data are filled in the form, through the NIBSS system, the information would be generated for the purpose of know your customer (KYC).

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“It is being done in a way that the form can either be submitted through the shareholder’s bank branch or registrar and at any point in time, the shareholders would be attended to and get results,”

It was gathered that the details of the committee’s proposal will be unveiled at the Capital Market Committee (CMC) coming up next week in Lagos, where it would be approved by all market stakeholders for it to become operational afterwards.

Recall that Ripples reported that unclaimed dividends returns filed by 112 companies as at December 2014 stood at N55.22 billion.

The Director General of SEC, Mr. Mounir Gwarzo, last February called on Registrars to ensure 100 per cent compliance on e-dividend as one of the ways of reducing unclaimed dividends. He also charged them to ensure efficient service delivery, and total support for dematerialisation.

Besides the call, SEC had given a directive that unclaimed dividends be returned to companies after 15 months of declaration.

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