… NCDMF To Warehouse non-existent shareholders dividend
BY CHINYERE OBIORA, LAGOS –
The Director General of Securities and Exchange Commission (SEC), Mr Mounir Gwarzo says over 2.2 million shareholders have so far been captured on the e-dividend mandate platform as at April 30, 2017.
He also said Direct Cash Settlement (DCS) will become mandatory for all investors in the Nigerian stock market beginning from September 1, 2017.
Gwarzo, who spoke at the 2017 first post Capital Market Committee (CMC) media conference in Lagos on Wednesday, said investors in the capital market would henceforth be credited directly with the net proceeds of stock market transactions as part of measures to tackle illegal sales of investors’ securities.
The DCS is a procedure of having cash proceeds from trades executed by brokers on the Exchange going straight into investors’ nominated bank accounts.
According to Gwarzo, despite the negative indicators, the capital market community recorded appreciable success level on several initiatives embarked upon in 2016, adding that these include complete review of major laws on investment business in Nigeria; achieving 100 per cent dematerialisation of shares in the Nigerian capital market; and reducing the quantum of unclaimed dividend in the market.
Other feats listed by the SEC boss are issuance of guidelines for the settlement of all types of securities in conjunction with the Central Bank of Nigeria (CBN); launch of the Nigerian Journal of Securities Market; expansion of the scope of allowable instruments for pension fund assets to include non-interest instruments and assets; training of pubic company secretaries; and the establishment of the West African Securities regulators Authority.
He added that although tremendous success had been achieved on the under-listed initiatives, they were not yet at a 100 per cent completion stage.
According to Gwarzo, they include, complete migration to the e-Dividend and Direct Cash Settlement Platforms; securing tax incentives from the FIRS for capital market transactions; the national savings strategy scheme; financial literacy campaigns; and adoption of a minimum technology standard.
As regards the use of non-existent identity in making multiple subscription of shares, the Committee resolved that, “investors who joggled their names for the purpose of multiple subscription should be given a forbearance period of six months within which they can lay claims to both their shares and accruing dividends, subject to establishment of their identity and a verification process by the SEC, failing which such shares and accruing dividends shall be transferred to the Nigerian Capital Market Development Fund (NCDMF).”
The committee also said shares and accruing dividends of non-existent shareholders be forfeited and transferred to the NCDMF, adding that, “That going forward, any person who engages in such act shall be prosecuted.”
At the meeting, capital market operators expressed optimism over the market performance in the 2017 fiscal year, just as they said certain initiatives have to be implemented within the year, which would be carried out alongside implementation of other on-going initiatives.
For the operators, initiatives meant to boost investors’ confidence in the market include revamping the Nigerian Commodities market; launching of the Nigerian Capital Market Development Fund; commencing the Risk Based Supervision model and robust overhauling of the capital market operators’ database to contain up-to-date information of all market operators .