Unclaimed dividend: SEC reads riot act to companies, registrars

The Securities and Exchange Commission (SEC) has warned quoted companies and capital market registrars to desist from selective payments and distribution of dividends.

The Director-General of the SEC, Mr Lamido Yuguda, stated this at the 10th annual conference of the Institute of Capital Market Registrar’s (ICMR) with the theme ‘Reinventing the Nigerian Capital Market for Growth: The Digital Technology Approach’, held in Lagos Saturday.

Yuguda who said that some registrars are unwilling to release the unclaimed dividends in their custody and have employed several antics to frustrate shareholders from enjoying the benefits of the E-DMMS platform, urged 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 “Capital market operators, have a duty to uphold the integrity of the capital market to foster investor confidence as Investors are the greatest assets any capital market has. The Commission would therefore not hesitate to sanction any erring operator in relation to unclaimed dividend or any other issue.”

The SEC DG also stressed the need for optimal regulations of digital technology in the capital market to forestall likely disruptions that could threaten investors’ confidence.

According to him, as much as digital technology is expedient for the growth of the capital market, disruptions could threaten investors’ confidence in the market if digital technology is left unregulated.

Yuguda said the Commission had recognised that if the application of digital technology to financial market practices are not properly regulated, it could lead to outcomes that would threaten investor confidence in our market.

Yuguda noted that in consistence with the position of IOSCO, the commission has been sensitive to the regulatory challenges of a changing technological environment and has sought to balance the benefits of encouraging innovation and the use of new technologies against the need to protect investors and maintain orderly markets.

Yuguda, while noting that the Commission’s priorities are to ensure investor trust and confidence as well as fair, orderly, transparent, and efficient markets, said the Commission had issued rules to regulate several technology-driven activities in the capital market such as crowdfunding, robo-advisory and digital sub-broking.

“To actualise this, we have adopted a three-pronged approach to regulating Digital innovation, which is safety, market deepening and provision of a solution to problems,” he said.

He, however, assured that SEC would continue to ensure that intermediaries harness digital technology in such a way to better serve the needs of investors in all aspects of the capital market and also 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,” he said.

Earlier while in his welcome address, the President/ Chairman of Council, ICMR, Mr Seyi Owuturo, said the Institute believed that the deliberation was auspicious at a time when the COVID-19 crisis had brought digital transformation in the way companies in all sectors and regions do business.

Owoturo thus said the Institute expects digital technology approach to drive positive outcomes in streamlining processes, harnessing data and shaping entirely new ways of doing business.

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