SEC to underwrite Nigerian investor’s e-dividend costs

The Securities and Exchange Commission (SEC) of Nigeria has committed to underwrite the cost for Nigerian investors to enroll in the new e-dividend platform over the next 150 days.

This was disclosed by the Director General of SEC, Mounir Gwarzo at a press conference in Lagos to mark the end of the capital market committee meeting for the 1st quarter of 2016.

“The deadline for investors to enroll for the e-dividend platform without paying a fee to the banks was April 13,” Gwarzo said.

“SEC has now undertaken to underwrite the cost for the next 150 days for investors in Nigeria’s capital markets.”

The Nigeria SEC had earlier this year embarked on a major push to end the growing problem of unclaimed dividends of equity market investors estimated at N80 billion at the end of 2015.

This is to be achieved using electronic dividends that are paid directly into investor bank accounts which can be either savings or current.

The SEC is driving the E- dividend move in collaboration with the Central Bank of Nigeria (CBN), committee of Heads of Bank operations, institute of capital market registrars and the Nigeria interbank settlement system to ensure that all dividends are now to be paid into bank accounts of investors that have completed the electronic dividend registration.

Bayo Olugbemi the Chairman of Governing Council of the Institute of Capital Market Registrars (ICMR) said, “Without shareholders keying into the e-dividend, we cannot force them to do it.

Shareholders need to be encouraged to fill the form to detach from registrars to brokers.”

Meanwhile the SEC DG has rolled out the 2016 action plan for the commission which includes:

Getting the FG to buy into the capital market master plan, issuing a sovereign Sukuk this year, encouraging new listings, increasing the savings rate of Nigerians and deepening the amount of people enrolled for the e-dividend programme.

“We intend to do a robust presentation at the Federal Executive Council (FEC) to get the Federal Government to endorse the capital market master plan as one of its policy documents,” Gwarzo said.

Elements of the Capital Market Master Plan include its implementation Council or (CAMMIC), launching of the National Investor Protection Fund (NIPF) and inauguration of its board, as well as the unveiling of the SEC Corporate Governance Scorecard for public companies.

On the non interest capital market the SEC DG said the country needs to issue a Sukuk (or non interest bond) to provide the necessary sovereign yield curve for other sub national corporate or state government issuers.

“We are working with the DMO, NSE and CBN to diversify our product offerings to include more sukuk. Countries that have issued Sukuk include Luxemburg, U.K and China and Nigeria should not be an exception.”

The E-dividend push by the SEC is part of a series of programs aimed at building back retail investor confidence in the market.

Domestic investors accounted for 46.2 percent or N880 billion in transactions in 2015 according to data from the Nigerian Stock Exchange (NSE).

Of the amount, domestic retail investors were responsible for N382.7 billion in transactions, equivalent to 43.4 percent, with domestic institutional investors making up the rest.

“We need more public enlightenment to get more investors to enroll in the e-dividend. Today we have seen a more than 4,000 percent increase in enrollment levels between January and April. However we need more of the 3 million retail investors to enroll.”

The Nigeria Interbank Settlement System (NIBBS) and CBN are partnering with SEC on the e-dividend to deepen the Nigerian capital markets.

Samuel Oluyemi, Senior Manager for Vertical Markets Group at NIBBS said: Other Federal institutions are understudying the SEC on how they have managed to succeed on their e-dividend initiative.”

PATRICK ATUANYA