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SEC postpones deadline for transitioning to e-dividend payment

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 The Securities and Exchange Commission (SEC) says consequent upon feedback it received from various stakeholders in the capital market, the deadline of Monday, June 3, 2013, for the transitioning to e-dividend payment is postponed till further notice.

Amid this postponement, SEC also encourages listed companies and registrars to do all that is necessary to reduce the quantum of unclaimed dividends valued at about N60 billion at the end of last year.

The commission says this decision will enable it to further enlighten retail investors and other investing publics on the merits of e-dividend payment, adding that “the commission is also engaging the monetary authorities on modalities for e-dividend to be paid into both savings and current accounts.

“We hereby assure all investors that protecting their interest is the key focus of the commission. In this respect, the commission is seeking to ensure that investors no longer lose their dividends due to diversion and loss of dividend warrants. We also encourage listed companies and registrars to do all that is necessary to reduce the quantum of unclaimed dividends.”

Market watcher will recall that over the years, payment of dividends to shareholders of quoted companies in Nigeria has been fraught with many administrative bottlenecks leading to rising incidences of unclaimed dividends.

This perennial problem has generated a lot of debate that has consequently attracted the concerns of all stakeholders in the Nigerian equity market, especially the investors. Analysts believe these investors concerns are not misplaced as dividends are a major attraction to stock investment.

Barely five years ago (June 16, 2008) the SEC launched the electronic payment system (e-dividend) after several months of deliberation by various stakeholders such as the Nigerian Stock Exchange, the Central Bank of Nigeria, Nigerian Inter-Bank Settlement System, capital market operators and shareholders’ associations, among others.