Come June 31, 2017, registrars operating in the country’s capital market will stop the issuance of dividend warrants to investors, the Securities and Exchange Commission has said.
The directive, which will mandate registrars in the Nigerian capital market space to discontinue sending hard copy warrants to the contact addresses of shareholders, is aimed at compelling retail investors to embrace the electronic dividend registration, according to the regulator.
The move is also expected to check the rising unclaimed dividend figure in the capital market, which is currently put at N80bn.
E-Dividend is an online dividend payment platform which facilitates the seamless crediting of an investor’s account after 24 hours of dividend payment by the issuing company.
The SEC’s Director-General, Mounir Gwarzo, said these while addressing journalists during the post-Capital Market Committee second quarter press briefing held in Lagos on Wednesday.
He, however, decried the low level of patronage for the e-Dividend registration in the market, revealing that only 6,000 investors had accessed the platform to date since its inception.
In a bid to encouraging more investors to leverage the platform, the SEC DG explained that the CMC had agreed that all banks should appoint an e-Dividend champion that would interface with retail investors to ensure seamless registration.
He said the e-Dividend champions would forward all issues associated with the registration to the Nigerian Interbank Settlement System to give clarifications on the issue within three days.
Gwarzo noted that the commission had also extended the write-off period for free registration process from September 14 to December 31, 2017 to enable more investors to partake in the exercise.
The SEC boss said, “The report we are getting from NIBSS is very discouraging, as only about 6,000 Nigerians have registered on the e-Dividend platform.
“SEC has been in the vanguard of advocating that people should register on the e-Dividend platform, but there seems to be misunderstanding between the bank and investors. But this misunderstanding has been resolved and going forward, there will be an improvement.
“People were frustrated with the misunderstanding between the banks and investors, and at the meeting, we agreed that banks should appoint e-Dividend champions to handle the operations of each bank on the registration.
“We also agreed that henceforth, by the end of June 31, 2017, no registrar will issue e dividend warrants to any investor to enable them to embrace the exercise.”
On the new capital requirement for capital market operators, he said that the commission’s December 31, 2016 final deadline would not be extended.
He said that the commission would continue to clear any operator that could meet with the recapitalisation exercise till December 31, 2016.
“The commission would withdraw the licence of any CMO that failed to meet up with the requirement at the expiration of the deadline be it a dormant CMO or the ones on suspension,” he stressed.
He stated that any operator that failed to meet up with the recapitalisation exercise would seek for new licence at the expiration of the deadline if the operator wished to remain in the market.