The Securities and Exchange Commission (SEC) at the weekend disclosed that the total value of unclaimed dividends in the Nigerian capital market increased by 7.3 percent from N158.44 billion at the end of 2019 to N170 billion by December 2020.
The commission’s Director General, Mr. Lamido Yuguda, made the disclosure at the second post-capital market committee (CMC) virtual news conference.
It would be recalled that last November, the House of Representatives’ Committee on Capital Market and Institutions had put the value of unclaimed dividends as N2.09 billion in 1999, N100 billion in 2017 and N120 billion in 2018.
Yuguda attributed the rising unclaimed dividends to challenges of identity management and multiple subscriptions of investors.
He explained: “We have problems with identity management in the Nigerian capital market and this is really one of the things the commission is trying to resolve. We have set up a high-powered committee to look at the issue.
“There are people who have bought shares under false names before. That is what we call the multi-subscription problem. The thing is yes there is a problem with the process and also there is a problem with us as a people.
“If you are buying securities using your own wealth, why would you use another person’s name? Why would you use a name that may not be traceable to you? And most of these things really became an issue after the introduction of BVN, because BVN is tied only to one name”, the market regulator added.
According to the SEC boss, as part of the commission’s initiatives to address the challenge, SEC constituted a committee on identity management for the Nigerian Capital Market in June 2021, adding that so far the total number of mandated and approved accounts on the electronic dividend mandate management system (e-DMMS) portal since its development in 2016 stood at 1,144,970.
The portal is a database for investors who have unclaimed dividends to register for the electronic collection of their unclaimed dividends and subsequent dividends.
Yuguda lamented that the COVID-19 pandemic adversely affected the registration exercise on the portal even as he hinted that members of the CMC have adopted measures to increase the number of mandated investors on the portal and reduce the rate of unclaimed dividends in the market.
He listed some of the measures as including automation for mandating to e-DMMS; increased monitoring of adherence to procedures and increased awareness campaigns on the initiative.
The capital market regulator further hinted that a training session would be organized by the Central Securities Clearing System (CSCS) to be supported by the e-DMMS technical committee; Institute of Capital Market Registrars (ICMR) and Association of Securities Dealing Houses of Nigeria as part of the efforts to increase the investors’ registration pace.
This is even as he also said that a study to determine the suitability of the CSCS to process dividends of investors in unlisted companies would also be conducted by the commission in furtherance of its drive to enhance investors’ knowledge on the capital market operations and the emerging dynamics.