Unclaimed dividends in Nigeria’s capital market has dropped significantly after investors consolidated about 3.4 billion shares. This is according to the acting Director-General, Securities and Exchange Commission (SEC), Mary Uduk.
Nairametrics understands that the capital market regulator had commenced the implementation of its consolidation of multiple shareholder accounts and electronic Dividend Mandate Management System (e-DMMS).
The SEC boss expressed satisfaction with the regularisation of multiple shareholders accounts under e-DMMS with about 2.7 million accounts so far captured.
According to Uduk, about 3.4 billion shares have so far been effectively consolidated with the help of the Multiple Subscription Committee.
Recall that SEC cut the turnaround time for processing and transferring shares from dead shareholders to their beneficiaries from three weeks to one week. SEC believes the move will help reduce the humongous number of unclaimed dividends in the Nigerian Stock Exchange as much as possible.
Prior to this development, in order to find an enduring solution to the perennial unclaimed dividend issue, the capital market regulator, about two weeks ago, cut the turnaround time for processing and transferring shares from dead shareholders to their beneficiaries from three weeks to one week.
Why this Matters: The decision will not only help beneficiaries of deceased investors to promptly receive their shares and dividend bequests, it will also guarantee service efficiency on the part of SEC, which will, in turn, enhance its corporate image.
Also, with the new development, beneficiaries and administrators of the deceased’s estates will have the confidence to approach companies where their benefactors held shares to claim their inheritance.
In the meantime, the fee chargeable for transmission of shares by registrars have been reduced to one percent of the total value, additional five percent Value Added Tax (VAT) for shares of N5 million and below, and 0.5 percent of the value and five percent VAT on shares above N5 million with a maximum chargeable amount of N200,000, excluding VAT.