Stakeholders give SEC DG six months to develop strategies to address unclaimed dividends issues

The senate committee on capital markets has asked the Security and Exchange Commission (SEC) to strengthen the know your customer (KYC) requirements to identify owners of unclaimed dividends.

The committee made the recommendation on Monday when it met with the SEC and key stakeholders in the capital market to develop practical strategies to address the issue of unclaimed dividends in Nigeria.

At the meeting, the shareholders mandated the SEC to deploy modern technology to identify owners of unclaimed dividends and compile comprehensive data.

The attendees collectively agreed that Emomotimi Agama, the director-general of SEC, should present the necessary strategies to the senate panel within the next six months to facilitate the reclamation of unclaimed dividends from the Debt Management Office (DMO).

Stakeholders noted that the DMO should not retain 10 percent of the funds, as currently permitted by the Finance Act.

The SEC had said unclaimed dividends in the capital market increased to an estimated N190 billion in 2023, describing it as a “serious problem”, and seeking the collaboration of relevant stakeholders to tackle the issue.

Speaking at the meeting, Senate President Godswill Akpabio, said the forum aims to uncover the root causes of unclaimed dividends, empower investors, protect their interests, and unlock the full potential of the capital market.

Osita Izunaso, chairman of the senate panel, said dividends declared over five years amounted to N5 trillion, averaging N1 trillion annually — stressing that further promotion of the stock market could yield even greater financial benefits.

He asked the SEC DG to intensify efforts to identify the owners of unclaimed dividends through extensive enlightenment activities.

“A lot is on your shoulders because you are the main regulator. Now, there is a need to strengthen the know your customer requirements,” Izunaso said.

“I have said it here. It is very key. Once you strengthen the KYC requirements, some of these issues will be taken care of.

“The shareholder’s representative that spoke was talking about their website where all these things will be there, once you go to that website, you will see everything.

“I don’t know whether there is such a website in existence. If there is, please, make sure that the public knows about it. If there is none, let there be one. So that all these stories will not come up again.

“They will just go to the website and you see everything there.”

Izunaso said essential legislation is crucial to instill confidence in the capital market.

“Somebody said here and I concur with that person completely that capital market is something that involves trust,” he said.

“Once that trust is eroded, people will not want to invest again. You know since the crash of the capital market in 2018, a lot of people still don’t have confidence in the capital market.

“So it is our collective responsibility to make sure that this confidence is built back.”

Izunaso emphasised the importance of leveraging technology, adding that the national assembly has a role to play, and part of that involves amending the Finance Act.