In a continuing attempt to get rid of unclaimed dividends in the capital market, the Securities and Exchange Commission (SEC) has indicated that work is still being done to construct the E-Dividend Management Mandate System (e-DMMS) platform.
The distributable earnings of a firm are paid out as dividends. Retained earnings are the earnings that aren’t distributed. Unclaimed dividends are a problem when a shareholder does not claim a payout for any reason.
Remember that the SEC’s efforts to address the nation’s capital market’s rising unclaimed dividends have continued to meet resistance as the commission reported that the amount had increased to N170 billion as of December 2020 from N158.4 billion recorded in 2019.
In fact, the topic of unclaimed dividends has continued to dominate discussions among shareholders, the regulatory body, and the government.
The e-dividend committee has completed its preparations to reconstruct the platform, according to SEC Director-General Lamido Yuguda, and is now working to quickly launch the new platform.
Additionally, the capital market committee members have taken other actions to raise the number of mandatory investors on the e-DMMS and decrease the amount of unclaimed dividends in the market.
Yuguda claims that the redesigned platform includes, among other things, a renovated web interface, an Application Programming Interface (API) for banks and registrars, and a central submission of e-dividend mandate forms.
He revealed that the SEC has committed significant resources and started a number of investor education programs to make sure that investors switch their accounts so they may earn their dividends on 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 head of the SEC expressed gratitude for the efforts made by the House of Representatives Committee on Capital Markets and Institutions on Unclaimed Dividends to look into the rising value of unclaimed dividends and unremitted withholding tax on dividends.
Yuguda reaffirmed the commission’s willingness to give the committee all the assistance it needs to complete its task.
Additionally, he emphasized the necessity of the financial sector’s players working together to pass the Investments and Securities Bill 2022, which will improve the performance of the Nigerian capital market and bring it in line with international best practices.
