SEC Okays E-dividend For Efficient Shareholders’ Payment
BY CHINYERE OBIORA, LAGOS – The Acting Director General of Securities and Exchange Commission (SEC), Dr Abdul Zubair says the introduction of e-dividend management system in Nigeria’s capital market will promote efficiency in dividend payment to shareholders.
Zubair noted that until recently, less than 20 per cent of investors had dividends posted directly to their accounts and described the development as appalling.
He attributed shareholders’ non-receipt of their dividend to the weak postal system, leading to loss of many dividend warrants in transits.
The SEC boss said in its bid to overcome challenges hampering investments in the capital market, the Commission partnered with the Central Bank of Nigeria (CBN) and Nigerian Interbank Settlement System (NIBSS) to develop an electronic platform for enrolling all shareholders into the e-dividend platform.
Addressing the Capital Market Correspondents Association of Nigeria (CAMCAN) at their annual workshop in Lagos, Zubair said once enrolled, dividends are credited directly into investors’ bank accounts against the current system that relies on posting dividend warrants.
He further stated that the ease of dividend payment can significantly boost retail investor’s confidence, curb unclaimed dividend phenomenon and encourage more Nigerians to save and invest in the market.
The SEC Chief Executive also said the Direct cash settlement was initiated to ensure investors received proceeds of their share sales immediately, explaining that before the direct cash settlement, investors could not receive proceeds of sale of their shares directly.
According to him, in those days when shares were sold, the proceeds were credited to the accounts of their brokers before being remitted to the investors, adding that the old process was fraught with many pitfalls, such as delayed remittances, frauds and other forms of infractions.
He noted that the period had many complaints inundating the Commission from concerned investors, especially as they relate to delays and non-remittance of funds by some stock brokers.
On the performance of the market, Zubair said as at September 2017, the total value of issuances in the market amounted to N1.55 trillion with Equities accounting for 12 per cent.
He said at the secondary market total equities transactions also rose by 78.6 per cent to N1.655 trillion between 2016 and September 2017 while foreign transactions increased by 47.31 per cent during the period.
Similarly, the Nigerian Stock Exchange ALL Share Index (ASI) has returned 47.11 per cent as at December 7, 2017 which is a remarkable recovery for the Exchange.
He said at the FMDQ OTC Exchange, the total turnover in August 2017 stood at N12.9 trillion and N12.18 trillion in October 2017 with Treasury Bills dominating exchange activities
