NIBSS platform frustrates SEC e-dividend exercise

The e-dividend portal provided by Nigeria Inter-Bank Settlement System (NIBSS) “hardly opens” and is frustrating investors efforts to ensure they complete their ongoing e-dividend Free Registration.
Ahead of the February 28 deadline, BusinessDay visited some banks (names withheld), but disappointingly came out with same story told over time.
All investors in the Nigerian Capital Market have since been advised to take advantage of the on-going free registration and register by approaching the nearest branch of their bankers or registrars for enrollment before the deadline.
Since the launch of the e-Dividend Mandate Management System (e-DMMS) Portal on July 29, 2015 by the Securities and Exchange Commission (SEC) and the commencement of the exercise, the Commission has consistently extended deadlines for the Free Registration without anyone telling Nigerians what is responsible for such.
The free registration is to ensure shareholders got their dividends electronically, instead of the hassles they usually passed through to process it manually via the banks, and most time postal services making dividend not reaching the shareholders.
Earlier this year, Abdul Zubair, acting Director General, Securities and Exchange Commission (SEC) said that the Commission has spent about N315 million for free e-dividend registration for shareholders across the country.
Since the commencement of the electronic dividends (e-dividend) registration exercise, the Securities and Exchange Commission (SEC) has been bearing the marginal cost of N150 per shareholder.
The e-dividend Free Registration exercise had expired on December 31 2017. As at last month, only 2.1 million investors have been registered under the e-dividend registration
The SEC, in reviewing the progress of the e-Dividend Registration exercise, after the December 31, 2017 previous deadline, noted that there was still a great influx of shareholders desirous of mandating their bank accounts for payment of dividends electronically.
A shareholder who spoke to BusinessDay in one of the bank branches visited said “most bank branches in Lagos are not successfully completing the e-dividend form as directed by SEC.”
According to him, “the bank branches I visited, their e-dividend portal never worked. They continue to ask one to come back. As I speak to you, I have been to a tier-one bank branch in Anthony Lagos, it is the same story,” he said.
“On the other hand, some Registrars continue to turn shareholders back on ground of irregular signature,” he said.
When asked how many companies he has been able to mandate e-dividend and how many that remains, he said, “I have done e-dividend on eight companies, while 17 more are still outstanding. This is frustrating,” he said.
When BusinessDay visited a branch of one of the Tier-2 bank located by Opebi roundabout, Ikeja also in Lagos, it is the same story.
“The portal is slow,” the bank staff said, “it is hardly fast.”
Another shareholder told BusinessDay that he ended up doing his e-dividend mandate through his stockbroker, adding that it was due to “nonchalance attitude shown by bank staff. Also, some of them are not conversant with SEC rules on the e-dividend,” he said.
In light of the foregoing challenges, the SEC again chose to extend the period for the free e-Dividend registration exercise till February 28, 2018, “to encourage more shareholders to mandate their bank accounts.”
Shareholders that are yet to register have since been advised to continue to approach their banks or registrars to mandate their bank accounts for the collection of their dividends electronically, including unclaimed dividends, not exceeding 12 years of issue.
SEC requires that all Registrars’ offices/accredited outlets be points of upload of completed e-Dividend Mandate forms by investors “who may alternatively approach their banker to process their completed e-Dividend Mandate Form(s).”
The apex regulator also notes that every registrar should validate investor’s Shareholder Account Number, Name, Signature and Clearing House Number (CHN), adding that; “This shall be followed with upload of scanned copy of completed e-Dividend Mandate Form(s) on to the portal for immediate access by the investor’s nominated Bank for the verification of his/her Bank account details.”
In a bid to finding lasting solution to the problems of unclaimed dividends in Nigeria, the Securities and Exchange Commission (SEC) in partnership with the Central Bank of Nigeria (CBN) and Nigeria Inter-Bank Settlement System (NIBSS) inaugurated an e-dividend portal.
Increasing amount of unclaimed dividend discourages investors from investing in the stock market. From a little over N2 billion in 1999, the figure by the end of 2008 had risen to about N20 billion. And now the SEC estimates that the value of the unclaimed dividends had increased to about N103 billion as at December 2017.
Analysts said the need for investors to enrol in the e-dividend registration platform cannot be underestimated.