… 2.5m accounts mandated

By Nkiruka Nnorom

The Securities and Exchange Commission, SEC, has extended the deadline for consolidation of multiple accounts by one year to December 31, 2019 from the initial deadline.

The affected investors are those  that subscribed to shares of the same company with different names.

Also, in order to boost the e-dividend mandate and Direct Cash Settlement initiatives, the Commission said it is collaborating with the Nigeria Inter-Bank Settlement System (NIBSS) to facilitate identity and account validation in an effort to tackle identity theft.

The Director General of SEC, Ms. Mary Uduk, disclosed these yesterday at the third quarter post-CMC press briefing in Lagos, saying that 2.5 million accounts have been mandated since the commencement of the e-dividend registration campaign.

Recall that during the capital market boom, some investors subscribed to shares of the same company using different names, while in some cases, others joggled their names in order to subscribe for more than the required quantity, leading to ballooning unclaimed dividends.

In order to address this, SEC came up with account regularisation process that allows investors to consolidate their multiple subscriptions into a single account.

The Commission had, also set December 31, 2018 deadline for completion of the process, saying that proceeds from unregularised accounts would be transferred to the Capital Market Development Fund (CMDF) at the expiration of the deadline.

But addressing newsmen yesterday, Uduk said that after review of the progress made so far, the Commission decided to extend the exercise to allow more investors key into the initiative and take possession of their outstanding unclaimed dividends and bonuses.

Uduk added that extension will also make up for any disruption that might be caused by the upcoming election, while saying that all the receiving agents that participated in public offerings have been directed to filter the names of the people that have multiple subscriptions and contact them for account consolidation.

She said: “The SEC identified that the overarching objective of the multiple subscription regularisation was to use it as a vehicle to reduce unclaimed dividend in the market. As long as people with multiple subscriptions cannot claim the accruing dividend, each time companies declare dividends, the unclaimed dividend will grow. So, it was well established and because it has this overarching objective, it was agreed that every retail and institutional investor that participated in multiple subscription is captured to ensure that they regularise their multiple accounts and consolidate them into one.”

On identity management, Uduk said: “The Commission will also work with other major stakeholders in setting up a committee that will look into and proffer solutions to problems around identity management in the Nigerian capital market.”

She noted that the Commission has commenced the implementation of measures to strengthen regulatory capacity by establishing a Commodities Division in the Commission in furtherance of the commitment to develop a vibrant commodities eco-system.