SEC to sanction CMOs frustrating e-dividend mandate

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The Securities and Exchange Commission (SEC) has stated that it will sanction erring Capital Market Operators (CMOs) frustrating the e-dividend mandate process.

Dividends are distribution of profits by a corporation to its shareholders and as at the last count, unclaimed dividends in the Nigerian Capital market stands at N200 billion.

Speaking during a post-Capital Market Committee Meeting (CMC) press briefing webinar, its Director General, Lamido Yuguda, said that as the Commission works towards resolving any legacy issues with unclaimed dividends, all stakeholders are implored to comply with all directives of the Commission in this regard, as defaulters would be sanctioned appropriately.

“There is no reason why there will be unclaimed dividends for new investors or newly listed companies as every investor should be promptly paid his/her dividends upon declaration and payment. The Commission has ob- served that certain Capital Market Operators (CMOs) frustrate the e-dividend mandate process. We have observed that the growth in the number of mandated accounts has been on the decline for some time.

The capital market community has directed its e-Dividend Committee to engage with the Committee of Heads of Banking Operations to encourage better cooperation from banks as we tackle the challenges of unclaimed dividends”, he stated.

Yuguda said the Commission has exposed new rules on implementation of the e-dividend mandate and treatment of unclaimed dividends, adding that the Commission is monitoring compliance and will not hesitate to sanction erring operators.

He reminded all CMOs that the commission’s directive on the update of investors’ Know Your Customer (KYC) information was still in effect noting that the level of compliance had been low in spite of several engagements by the commission.

Yuguda revealed that 4.01 million accounts still have incomplete KYC information as of April 8 despite the government’s efforts.

“Despite several engagements, we realised that as of April 8, there were still 4,012,311 accounts with incomplete KYC information. This exercise is critical to deepening the participation of retail investors and we direct all CMOs to accord it the highest level of priority.’’

The SEC boss also added that the commission would continue to engage players in the Fintech space and support them to operate lawfully in a bid to ensure the delivery of safe products and services without stifling innovation and added that it is in discussion with the Central Bank of Nigeria (CBN) on how to better understand and regulate the crypto-currency market in the country.

He stated that it became imperative for the commission to issue this notice for the protection of investors and to preserve the sanctity of the Nigerian capital market as only registered capital market operators are permitted to intermediate in the Nigerian capital market and only through approved channels,”

According to him, the SEC does not want any unregulated entity to participate in the market because if there are issues it becomes very difficult to resolve.

“The Commission recognizes the impact of FinTechs on capital market activities, and wishes to assure the public that we remain accommodative of this development. We shall continue to engage players and support them to operate lawfully.

Our aim is to ensure the delivery of safe products and services without stifling innovation, I therefore en- courage FinTech firms to approach the Commission for due registration and desist from operating illegally”, he said.