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By Chinenye Anuforo and Chinwendu Obienyi
As the deadline for issuance of physical dividend warrant draws near, strong indication show that some shareholders are yet to key into the e-dividend platform.
This is even as the Securities and Exchange Commission (SEC), has said the December 31, 2017 deadline for the ongoing e-dividend exercise remains sacrosant despite pleas by stakeholders to extend it.
The Commission also said by same December 31, 2017, its underwriting cost of the e-dividend would end. Hence, any shareholder that wants to key into the platform would have to pay N150 to the bank before doing so.
The e-dividend is an electronic dividend payment, which will enable an investor’s bank account to be credited after 24 hours after dividend is declared.
The Director General of SEC, Mounir Gwarzo, described the e-dividend platform as a game changer in the market that will ensure that infractions are reduced to the barest minimum.
It was in this respect that the Commission explained that it provided a platform where all investors that are yet to register can search for their names, even as the already registered ones could also ascertain their registration status on the same portal.
According to SEC, “all investors, whose names appear, are advised to urgently contact the nearest branch of their bank or registrar to register for the collection of their unclaimed dividends and subsequent dividends electronically, as well as for the Direct Cash Settlement (DCS) of proceeds from secondary market transactions, to be credited to their preferred bank account.
The apex regulator maintained that the deadline would compel retail investors to embrace the exercise and stem the rising unclaimed dividend in the capital market, currently put at over N90 billion.
SEC added that the deadline would see the end of free registration of e-dividend embarked upon by the commission since the inception of the exercise in November 2015, to encourage more patronage of the exercise.
“The commission also wishes to remind the investing public of the deadline of December 31, 2017, which will mark the end of issuance of physical dividend warrant, with a view to mitigating the risks associated with physical dividend warrants and improving investors’ experience.
“Furthermore, the December 31, 2017 dateline will see the end of free registration of e-dividend, being bank-rolled by the commission since the inception of the exercise in November 2015. Hence, members of the investing public are encouraged to urgently key into the ongoing free registration period.
“All investors in the Nigerian capital market are advised to take advantage of the ongoing free registration period and register by approaching the nearest branch of their bankers or registrars for enrolment before the deadline,” SEC added.
Recall that to point out one of the benefits of e-dividend, the SEC boss said registrars have been able to pay out N29.3 billion of the N90 billion of unclaimed dividends recorded at the beginning of the year, through the e-dividend scheme.
The SEC DG’s claim was corroborated by Head, Vertical Markets Group, Nigeria Inter-Bank Settlement System (NIBSS), Samuel Oluyemi, who said precisely N29,277,739,604 has been paid out to investors, representing a decline of 32.6 per cent in unclaimed dividend as at October 2016.”
Gwarzo commended the registrars for this achievement, adding that SEC achieved the milestone through the nationwide advocacy of all the stakeholders in the market.
“E-dividend is in the interest of retail investors. Our focus is to bring back the confidence of the retail investors to the market,” the DG said.
Despite this awareness by the stock market apex regulator on e-dividend, some shareholders are yet to key into the mandate probably because of lack of knowledge of advantages that abound in it.
Here are some of the benefits to shareholders; the E-Dividend Mandate Management System (E-DMMS)makes it possible for your dividend to be paid directly into your savings or current account in any bank of your choice.
It allows you to register your bank account details for electronic payment of dividends into your preferred account.
E-dividend payment would help to avoid a situation where the company you invested in is paying dividends but yours is not getting to you, ending instead in the pool of unclaimed dividends. You can also register for e-dividend at any of your bank’s branches nationwide.
How to register:
•To start with, get your share certificates together and contact a stockbroker to help you sort out your holdings. Registrars and accredited outlets upload completed E-DMMS forms by shareholders who apply for e-dividend payment.
•You may go to any of your bank’s branches to complete the e-dividend mandate form, which will be verified and stamped by the bank and forwarded electronically to the registrar.
•Completed forms that have been verified by the bank will be forwarded electronically to the relevant registrars via the portal.
•The registrars will carefully register the shareholder’s account number, name, signature and clearing house number, and ensure that there is no mistake with the information. The shareholder’s number and company of investment will be indicated on the form.
•After this, the scanned copy of the completed e-dividend mandate form will be uploaded on to the portal, which can be easily accessed by the shareholder’s registered bank for the verification of his/her bank account details. The shareholder’s bank may reject the mandate uploaded by the registrar if there are discrepancies in what is uploaded and the information the shareholder has with his bank.
•Once the process is completed, the shareholder does not need to visit the registrar again.
