SEC Orders Companies To Honour Unclaimed Dividend Requests

The Securities and Exchange Commission (SEC) has directed all publicly listed companies in Nigeria to honour unclaimed dividend requests by shareholders.

The directive aims to protect the rights of investors and ensure that companies comply with regulatory requirements. The SEC’s move is expected to bring relief to shareholders who have been waiting to receive their dividend payments, and it underscores the regulator’s commitment to promoting transparency and accountability in the capital market

The Commission called on all public companies and Registrars to stop treating unclaimed dividends older than 12 years as ‘statute-barred’; especially those dating from before the enactment of the Finance Act 2020.

The directive reaffirmed the provisions of Section 60 of the Finance Act, which mandates that dividends unclaimed for over six years be transferred to the Unclaimed Funds Trust Fund (UFTF), where they remain accessible to shareholders pending claims.

The Commission said that shareholders are entitled to continue to claim their dividends that are not statute barred (that is not above 12 years) before December 31, 2020 when the Finance Act 2020, came into effect.

According to the SEC in a Circular, the attention of the Securities and Exchange Commission has been drawn to the fact that paying companies and their Registrars have continued to treat unclaimed dividends of public companies that are older than 12 years as being ‘statute-barred’ without recourse to the provisions of the Finance Act 2020.

“In response to various inquiries on the subject, the Commission hereby clarifies as follows: The import of the provisions of Section 60 of the Finance Act 2020 (December 31, 2020), is that, where dividends declared by a public company quoted on the Nigerian Exchange Limited remained unclaimed for a period of six years or more, such dividends are expected to be transferred to the Unclaimed Funds Trust Fund (UFTF) to be held in trust and managed pending when the shareholder presents a claim for such unclaimed dividends.”

It added that “pending the setting up and operationalisation of the UFTF by the federal government, pursuant to its powers under Sections 3 (4) (e) and 93 of the Investments and Securities Act 2025, the Commission hereby directs public companies and their Registrars to continue to honour all requests by shareholders for the payment of unclaimed dividends as described above, with effect from December 31, 2020.”

The Commission directed public companies and Registrars to effect immediate compliance with the directive and submit periodic reports on same in the manner prescribed in the Commission’s Rules and Regulations.