By Babajide Komolafe
The article last week on Electronic Dividend Mandate Management System (e-DMMS) portal introduced by the Securities and Exchange Commission (SEC) generated reactions from our readers. There were two major revelations from these reactions.
The first one which reinforced the focus of the last article is the fact that investors don’t know about the e-DMMS. But they want to know. The second revelation is that, it appears that the Securities and Exchange Commission (SEC) did not carry investors along in the process of developing and introducing the portal.
This point was argued by an investor, Alhaji Gbadebo Olatokunbo in his email response to Vanguard Investors Forum. He stated, “SEC should have arranged meetings with investors either in Lagos or Abuja to brainstorm on the issues involved. But they did not, and only gave directives to the investors on any policy, which is the reason for policy failure in Nigeria. It is never too late; SEC should hold Investors Forum in Lagos, Abuja or any other place on the issue and invite the press to cover it.”
The SEC has a lot to learn from the Central Bank of Nigeria, when it comes to engaging stakeholders through town hall meetings and publicity of policy initiatives. For example, before introducing a major policy, the CBN will issue exposure draft of that policy and call for inputs from stakeholders, which would be used to amend the policy before introduction.
Secondly, especially in the case of the cashless policy, the CBN held several town hall meetings with various stakeholder groups, to explain the policy and get feedbacks. This is besides massive radio, TV and newspaper advertisements sustained over a period of time. These are the steps SEC should take before introducing critical policy initiative like the e-Dividend Mandate portal.
The initiative is good, but the implementation would determine the success. Given that the real targets of this policy are the retail investors (individuals), it is the extent to which they know, understand and agree with the terms of the e-Dividend portal, that the implementation would be successful.
As suggested above, the Commission should have discussed the idea with investors by holding stakeholders forums which would involve the shareholder groups. This should have been done before introducing the portal. Such meeting would afford SEC the opportunity to explain the objective and the methodology to investors, and also get their inputs, and make them apostles of the policy. It is however not too late for SEC to conduct such stakeholders forum.
One of the salient and silent aspects of the e-Dividend mandate is the issue of charges. The circular by SEC to the banks, registrars and the public is silent on this aspect. Is it free or investors are to pay for it? If it is not free, is the charge regulated and uniform? Or banks and registrars are free to charge what they like?
These are questions that need urgent answers from SEC and CBN. They are questions that investors would have asked during a stakeholders’ forum, if the SEC had cared to conduct one. (For comments, questions and enquiries pls write to firstname.lastname@example.org)