E-dividend will reduce infractions – SEC DG

Mounir Gwarzo, Director-General of the Securities and Exchange Commission (SEC) on Thursday described the e-Dividend platform as a game changer in the market that will ensure that infractions are reduced to the barest minimum.

Gwarzo, in Abuja at a Town Hall Meeting to sensitize the investing public on the e-Dividend registration currently going on all over the country.

The DG expressed satisfaction with the level of success recorded so far with the enlightenment programme and urged investors to take advantage of the service and visit their registrars or banks to register.

“We have all agreed that this is the way to go it is now left for the investors to go and register. We have agreed with all the stakeholders that for the first 90 days the registration is going to be free. After 90 days, anyone that wants to register will pay N100.”

“Once the e-dividend is in place the issue of stale warrant will be of the past, the issue of traveling from one place to another to deposit the warrant will be a thing of the past; the issue of change of address will also be eliminated.

“The issue of unclaimed dividend which according to our records is in excess of N80billion will also be a thing of the past. These unclaimed dividends came about from dividends of small stakeholders like you and me and we need to ensure that they are claimed.

Gwarzo also stated that once the registration process is over, the next phase will be to look into claims by investors who have dividends that are less than 12 years old.

“Once we are able to get through with the registration process, those dividends that are less than 12 years, once the registrars can certify that the people are the owners, they should be able to pay them. Gradually we should be able to address their problem of unclaimed dividends” he said.

He also listed the Direct Cash Settlement as a direct benefit to investors from the e-dividend registration as when they register for e-dividend, anytime their shares are sold, they would get the proceeds directly in their bank accounts.

“Once we get through with the e-dividend thing, we will be able to deal with other issues in the market. The entire market has commenced Direct Cash Settlement from this month. The era when shares will be sold and the proceeds will be given to the broker who will them pay the client is over. What is obtainable now is that once the shares of an individual are sold, the proceed is paid directly into his band account. With this once the client has authorized the broker and provided all his details, the proceeds will be paid into the client’s account.

“The era of proceeds not being remitted for shares sold will be a thing of the past. The e-dividend platform with the use of BVN is what will give us that. Once we register for e-dividend, we will also benefit from the Direct Cash Settlement. Another advantage of the e-dividend is that it will provide a very robust KYC to the operator.

“It is because of lack of KYC that we find a lot of infractions in this market. With the BVN platform which the e-dividend is leveraging on, the KYC will now be very robust. People will not be able to use all sorts of identifications to claim what does not belong to them.” He added.