By Habibat Aliu
The Securities and Exchange Commission (SEC) has stated that efforts are ongoing to rebuild the E-Dividend Management Mandate System (e-DMMS) platform in a sustained effort to eliminate unclaimed dividends in the capital market.
Dividends are the distributable earnings of a company. The earnings, which are not distributed, constitute retained earnings. When a shareholder for any reason does not claim a dividend, it gives rise to the issue of unclaimed dividends.
Recall that efforts by the SEC to tackle the rising unclaimed dividends in the nation’s capital market have continued to hit the wall as the commission announced that the figure had risen to N170 billion as at December 2020 from N158.4 billion recorded in 2019.
Indeed, the issue of unclaimed dividends has remained on the front burner of public discourse amongst shareholders, the regulator, and the government.
The Director-General of the SEC, Lamido Yuguda said the e-dividend committee has concluded plans to rebuild the platform and is currently working to roll out the new platform soon.
This is in addition to various measures adopted by the members of the capital market committee to increase the number of mandated investors on the e-DMMS and reduce the quantum of unclaimed dividends in the market.
According to Yuguda, the rebuilt platform involves having a centralised submission of e-dividend mandate forms, Application Programming Interface (API) for banks and registrars, and a revamped web interface among others.
He disclosed that the SEC has invested a lot of resources as well as embarked on a number of programmes on investor education to ensure that they mandate their accounts to enable them to receive their dividend in the capital market.
“The reason why the number may not be reducing as expected is because a lot of investors have not mandated their accounts. Dividends are now distributed electronically, so dividends go directly into the investors account and if everybody mandates their accounts, there would be little unclaimed dividends in the system.
“This process is still open and can be done with the registrars. Forms can be obtained from the banks too and it is a very simple process. We also have on our website, a tool that assists the investors to determine any unclaimed dividends that they have.
“I would encourage everyone to take advantage of these tools or to directly speak to the complaints section of the SEC and we would guide the person appropriately,” he stated.
The SEC boss expressed appreciation to the House of Representatives Committee on Capital Markets and Institutions on Unclaimed Dividends over its efforts to investigate the rising value of unclaimed dividends and unremitted withholding tax on dividends.
Yuguda assured of the commission’s readiness to provide all the necessary support to the committee to enable it carry out its assignment.
He also emphasised the need for the stakeholders in the financial sector to collectively work towards the enactment of the Investments and Securities Bill 2022, which will enhance the performance of the Nigerian capital market and align it with global best practices.
