Quoted companies and capital market registrars must desist from selective payments and distribution of dividends, the Securities and Exchange Commission (SEC) has warned.
The Director-General of SEC, Lamido Yuguda, gave the warning on Saturday at the
Institute of Capital Market Registrars (ICMR) 10th Annual Conference, Investiture of Fellows, Induction of Associates and Annual General Meeting in Lagos.
Yuguda said the Commission was aware that some companies and registrars carry out selective payments and distribution of dividends.
Also, he said some companies and registrars were unwilling to release the unclaimed dividends in their custody and were employing several antics to frustrate shareholders from enjoying the benefits of the E-DMMS platform.
The Commission, Yuguda said, would not hesitate to impose stiff sanctions on any erring operator in relation to unclaimed dividends or any other issues.
“We, therefore, urge the ICMR to encourage its members to uphold the Code of Ethics of the profession and as contained in the Rules and regulations of the commission,” he said.
Yuguda also lamented that the number of mandated accounts had been on the decline for some time, although the rate at which investors are coming forward to conduct their KYC has not been encouraging.
“I urge the ICMR and its members to do their best to address some of these challenges,” Yuguda added.
He said operators have a duty to uphold the integrity of the capital market to foster investor confidence, adding that investors were the greatest assets in the capital market.
Emphasizing the need for the ICMR and SEC to work together and leverage the opportunities that digital technology provides, Yuguda said this would help to resolve the lingering issues surrounding unclaimed dividends in the Nigerian capital market.
He spoke on the theme: “Reinventing the Nigerian capital market for growth: The digital technology approach.”
He said the commission would continue to engage with all stakeholders on new developments in the digital technology space.
“I believe that we all have a common interest in seeing these opportunities harvested, but also in mitigating the risks so that we all can reap the benefits.
“As you are aware, the SEC has committed resources to put in place several measures to address the issues of unclaimed dividend. Despite this commitment of resources, the issues still linger,” Yuguda said.
The Commission, he said, adopted a three-pronged approach to regulating digital innovation, namely safety, market deepening and provision of a solution to problems.
Yuguda said the SEC would continue to ensure that intermediaries harness digital technology in a way to better serve the needs of investors in all aspects of the capital market.
He said SEC recognized that if the application of digital technology to financial market practices was not properly regulated, it could lead to outcomes that would threaten investor confidence.
Yuguda said SEC would continue to ensure that intermediaries harnessed digital technology to better serve the needs of investors in all aspects of the capital market.
President & Chairman of Council, ICMR, Seyi Owoturo, said the COVID-19 crisis brought about digital transformation in the way companies in all sectors and regions do business.
Owoturo said the objective was to ensure the new combinations of talent and technology were delivering decisive advances and value in investor experience and operational efficiency.
“We expect digital technology to drive positive outcomes in streamlining processes, harnessing data and shaping entirely new ways of doing business.
“It is expected that the outcome of this conference will reposition the Nigerian capital market for growth, by creating a capital market that is attractive to investors and able to support the long-term investment needs across the private and public sectors of the economy.
“We are confident that by addressing the scourge of unclaimed dividends, the need for shared market infrastructure, and the changing role of regulators, the discourse in the conference will galvanize the drive towards repositioning the Nigerian capital market for sustainable growth,” he said.
The Managing Director/Chief Executive Officer of SystemSpecs Ltd., John Obaro,
spoke on exploring digital innovations to solve the issue of unclaimed dividends in the country,
He said technology could be used to open up new ways of operations, drive productivity, increase collaboration and partnership, among others.
To bring a lasting solution to the unclaimed dividend conundrum, Obaro said legislation and guidelines should be looked into, as current laws cannot motivate the industry players to aggressively seek a resolution.
He added that laws should be enacted and guidelines issued that move the customer to the centre of the benefits of investments, while there should be the automation of a properly integrated system. (NAN)