Capital market regulators and operators have reached agreement to discontinue issuance of dividend warrant as from June 30, 2017 as stakeholders consolidate initiatives aimed at full automation of transactions and payments in the market.
At the end of the second quarter meeting of the Capital Market Committee (CMC), stakeholders in the Nigerian capital market directed that registrars would stop issuing dividend warrants as payments for dividends as from June 30, 2017.
Shareholders will thereafter fully receive their dividends through the electronic dividend (e-dividend) directly into their bank accounts.
The CMC, chaired by the director general of Securities and Exchange Commission (SEC), consists of chief executives of all registered capital market operators including stockbrokers, solicitors, custodians, fund managers, issuing houses, rating agencies, registrars, reporting accountants, trustees and consultants among others.
Other members included chief executives of the Chartered Institute of Stockbrokers (CIS); Nigerian Stock Exchange (NSE), Abuja Securities and Commodity Exchange (ASCE) and Central Securities Clearing System (CSCS).
The CMC also included two members each from observer groups, which included Asset Management Corporation of Nigeria (AMCON), Central Bank of Nigeria (CBN), Corporate Affairs Commission (CAC), Debt Management Office (DMO), Federal Ministry of Finance, Federal Mortgage Bank of Nigeria (FMBN), Federal Inland Revenue Service (FIRS), Nigerian Deposit Insurance Corporation (NDIC), Investment and Securities Tribunal (IST), Nigerian Investment Promotion Council (NIPC), National Insurance Commission (Naicom), National Pension Commission (Pencom) and FSS2020.
At a post-CMC media briefing yesterday, Director General, Securities and Exchange Commission (SEC), said the full automation of dividend payment will ensure that shareholders receive their dividends without delay.
According to him, the e-dividend would stem the menace of unclaimed dividend and also ensure that the registrars can automatically pay the backlog of unclaimed dividends to verified shareholders’ bank accounts.
He said the Commission has undertaken to extend the free e-dividend registration till December 31, 2016, urging shareholders to take advantage of the opportunity to enroll for the e-dividend.
He lamented the poor response of shareholders to the initial e-dividend registration campaign noting that only 6,000 Nigerians have so far registered for e-dividend payment mandate launched by the SEC, the Central Bank of Nigeria and the Nigeria Inter-Bank Settlement System (NIBSS) in July 2015.
He stressed that the aim of the e-dividend system was to eradicate the difficulty encountered by retail investors in claiming their dividends.
