in a bid to reduce unclaimed dividends and increase liquidity in the capital market, Acting Director General of the Securities and Exchange Commission (SEC), Mary Uduk has enjoined more Nigerians to take advantage of the on-going electronic-dividend registration.
She made the call at an enlightenment programme on e-dividend and contemporary issues in the Nigerian capital market held in Enugu.
Uduk, who was represented by the head of SEC Port Harcourt Zonal Office, Mr. Obi Adindu said the commission was currently leading the entire capital market industry in an effort to migrate all shareholders to an e-dividend regime.
According to Uduk, “the essence of the e-dividend mandate management system is to eradicate or reduce to the barest minimum the incidence of unclaimed dividend. Unclaimed dividend is an undesirable feature of the Nigerian capital market which denies investors/shareholders the gains of participating in the capital market. It denies the economy access to the huge amount of money which should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy”.
Uduk said the e-dividend was designed to correct issues experienced by investors in the past. She said “it is a consequence of the bottlenecks which are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others”.
She noted that after declaration by the paying company and within a stipulated payment period through simple interbank transfer, the e-dividend regime bypasses these limitations by ensuring that dividends which do not exceed 12 years of issue are credited directly to an investor’s account.
Uduk noted that the commission is implementing various initiatives which are aimed at making the Nigerian market deeper, vibrant and more effective.