By Babajide Komolafe
IT is therefore mandatory for every registrar to immediately commence the use of the e-Dividend Mandate Management System Portal as directives will soon be issued to banks to discontinue the verification of paper mandates presented to bank branches.” (SEC).
THE second threat to the success implementation of the e-Dividend mandate portal is the lack of sense of urgency on the part the Securities and Exchange Commission SEC). This is evident in the above paragraph, which is an excerpt of the public notice.
SEC only indicated that verification of paper mandates (for e-dividend) would soon be discontinued, but it did not indicate when. What this implies is that the registrars are free to do it whenever they like, and they may even choose not to.
The willingness of registrars to embrace and use the e-dividend portal is crucial to the success of the initiative. However their willingness is a function of the readiness of SEC to compel them to embrace the initiative. So far, SEC has demonstrated it is not ready to compel them to do so.
Similar to the above is the lack of a timeline and probability of penalties for investors to embrace the e-dividend portal initiative. It is one of the salient reasons why e-dividend has been in-effective in reducing the volume of unclaimed dividend.
Thus, in addition to engaging shareholder groups and launching a mass publicity campaign about the e-dividend portal, SEC needs to stipulate timelines for registrars to comply. There should be a period of grace, but that period must be stipulated, while penalties for non-compliance indicated. SEC should take a cue from the CBN and the BVN project. If the BVN have succeeded, it is not just because of massive publicity, it is also because the CBN introduced restrictions. The ‘No Debit’ restrictions on accounts not yet linked to BVN is proving effective, and expediting enrolment and compliance.
Number of penalties
In this regard, there are a number of penalties that SEC can introduce to compel registrars to commence the use of the e-dividend portal. It may be monetary or administrative. The Commission can also introduce incentives or recognition for registrars showing leadership in this regard. Whatever it maybe, the most important thing is that the Commission should demonstrate its commitment to the e-dividend portal with regulatory actions that compel adoption by registrars.
This is because the registrars have so far demonstrated unwillingness to embrace or publicise the e-dividend mandate. For example, Investors Forum monitored the website of some registrars last week for information about the e-dividend portal, and the result was zero. The registrars are First Registrar, GTL Registrar (formerly Union Registrar), DataMax Registrar (formery GTB Registrar), and Africa Prudential Registrars. These are the major registrars in the country, and so far, none of them have deemed it fit to publicise the e-dividend portal on their website. If they have not done so on their website, definitely they are yet to do so in their offices, and off course none through text messages. This indicates unwillingness to embrace the e-dividend portal, and it is because the SEC is yet to show its readiness to compel them to do so.