SEC threatens to suspend outdated accounts, to address unclaimed dividends

The acting Director-General of the Securities and Exchange Commission (SEC), Mary Uduk, has disclosed that outdated accounts would be suspended as SEC makes effort to settle unclaimed dividends in the capital market.

Ban on outdated accounts: Uduk said new initiatives would be implemented to curb unclaimed dividends in 2020. She also said that to resolve all issues and ensure shareholders update their information, capital market operators would be afforded a period of time to comply. The update is necessary as transaction will not occur on any account without updated information.

SEC expresses its commitment to protecting investors against high charges, Mary Uduk, Mary Uduk

“Right now, you will not get unclaimed dividends from new issues. Part of the problem of unclaimed dividend has to do with identity management. We are doing all we can to educate the public on this issue and engaging various stakeholders to be able to get a lot of the information that we require.

She said“Items like the Bank Verification Number have been added to help in identity management; the capital market is also taking advantage of it. The Central Securities Clearing System and the registrars are working together to ensure that more information from the legacy shareholders are being collected to be able to update their information and get them to claim their dividends.

“The registrars do not have direct interface with shareholders, they deal directly with stockbrokers; but there is a committee comprising the SEC, registrars, stockbrokers, issuing houses, the CSCS and the Nigerian Stock Exchange, working on that in addition to the e-dividend management committee.”

What you need to know: Uduk said the information update was a legacy issue. According to her, many Nigerians bought shares in the capital market in 2008 before the introduction of Bank Verification Number (BVN). It was disclosed that some of the investors agreed to update their information after initially not providing their account numbers. The updated information was expected to be transmitted to the CSCS,  which would update the information and send them to the registrars.

At the last, Capital Market Committee meeting, it was agreed that stockbrokers would update the information of their clients. This, she said would address unclaimed dividends.

“We believe that by the time we commence that, it will address that issue of unclaimed dividend.

“Before you can complete the application, the system will validate your account number; it will not accept incomplete application.

“We believe that in addition to the e-dividend mandate, these other initiatives that the commission is doing with other stakeholders will address the issue of unclaimed dividends,” she said in a Punch report.

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