The director general of the Securities and Exchange Commission, Lamido Yuguda has blamed identity management for the significant amount of unclaimed dividends in the capital market which has now reached N190 billion.
The DG spoke yesterday at the post Capital Market Committee (CMC) press briefing. SEC and the capital market community held the CMC meeting on August 24, followed by press briefing on August 25.
Yuguda also mentioned some of the reforms the commission is currently undergoing.
“What we are currently doing in the Capital Market are reforms on custody, derivatives, trading, commodities exchange, in-house reforms (regulators) making them more efficient and technology friendly, crowdfunding, and global advisors,” he said.
Yuguda said that unclaimed dividends are a very serious problem because of several issues like identification issues, and multiple subscriptions, and also because a lot of companies have changed their name.
He said, “the issue of unclaimed dividends, why is it happening? Unclaimed dividends have become a very serious problem in our country because we have issues with identity management within the capital market. We have issues with multiple subscriptions.
“People were using different names to subscribe to share offerings. We had situations where not information was captured about individual subscribers. Then a lot companies changed their names. We have had legacy issues that have aggravated the problem of unclaimed dividends. But these are issues trying to resolve with the introduction of the electronic dividend payment.”
The SEC DG said, “The electronic dividend portal has been under some kind of reform. The committee on the electronic dividend mandate as well as NIBSS have been working to get the portal to perform better and become more user friendly so that we can substantially increase the investor experience in terms of uploading their details and also get this issue of unclaimed dividends significantly reduced.
“We are now tightening our Know Your Customers (KYC) requirements so that all information needed will be fully captured and these unclaimed dividends will be a thing of the past,” he said.
The SEC DG noted that he sees no problems with companies listing dollar bonds.
“I don’t see any problem with dollar bonds, any bond should be an obligation that is backed by the obligation to pay the bond. What matters is that the issuer of the bond is able to pay both principal and interest on the bond,” he said.
The DG spoke of the commission’s intentions to continue to offer products that are suitable to investors and has hence revised the Capital Market master plan.
“The capital market has a ten-year master plan from 2015-2025, We did a midterm review of the plan to revise the plan, and it has helped us achieve a lot and we continue to see these achievements in 2023,” he said.
The CMC meeting, held a day earlier underscored the Capital Market Committee’s dedication to propelling Nigeria’s economic growth, fostering collaboration, and embracing innovation to build a thriving future for Nigeria. It once again offered the capital market as a viable source of infrastructure financing for development.
Two Hundred and Seventy-Seven (277) stakeholders, comprising Management and senior staff of the Commission, Capital Market Operators (CMOs), representatives of relevant government agencies including the Central Bank of Nigeria (CBN), Debt Management Office (DMO), Federal Inland Revenue Service (FIRS), Investments and Securities Tribunal (IST), National Insurance Commission (NAICOM), National Pension Commission (PENCOM), and Financial System Strategy 2020 (FSS2020) participated in the event.
