By Peter Egwuatu

Shareholders have lamented the difficulties faced by beneficiaries in the recovery of shares belonging to deceased shareholders, stressing that it is one of those things discouraging people from participating in the Nigerian capital market.

Stocks

The Chairman of Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie in an exclusive chat with Vanguard MoneyDigest said: “What is the Securities and Exchange Commission, SEC, doing in this regard to remove some of all these bottlenecks hindering the progress of the market? It takes quite a long time to transfer the shares of a decease investor to his or her beneficiary. We expect the SEC to address this issue as quickly as possible in order to rekindle confidence in the market. There are many unclaimed dividend and multiple share accounts that are from deceased shareholders but due to the stringent requirements to reclaim such shares by the beneficiaries it becomes very tough the accounts to be regularised.

In the same development, National Chairman, Constance Shareholders Association of Nigeria, Shehu Mallam Mikail said: “It is not easy to transfer the shares of a deceased person to another person (beneficiary).  If a beneficiary wants to reclaim shares belonging to a deceased shareholder, the stockbrokers will ask the person to go and get letter of administration before any other things that may be required. If you go to the Probate Registry, you will be given a form to fill and after which you return back to the Registry before letter of administration is issued.

Continuing he said:  “The Registry will take three months to treat the form. You know that Letters of administration is granted upon application by a person entitled either personally or through his legal practitioner to the Probate registrar. Usually forms are issued to the applicant, to be returned, upon completion, to the Probate Registry. Grant of letters of administration would not be made within three (3) months (in Lagos state) from the death of the testator where he died intestate and every application for grant of letters of administration are usually published to allow for objections and the filing of caveats.

So part of challenges and drawback to investing in the equities market has been that of transmission of shares from one investor to another and claiming of investment of a deceased investor by the family members.

Response from SEC

Next of kin of a deceased shareholder may no longer face cumbersome process in relation to claiming the shares or proceeds from investment of his/her deceased family member as the SEC, plans to come up with rules that would facilitate the transmission of such investments.

Transmission of shares occurs when the shares of a deceased shareholder are inherited or bequeathed to an heir or personal representative of the deceased shareholder. It takes place in case of death, insanity or insolvency of a member or, where the member is a company, on its liquidation.

The Acting Director General of SEC, Ms. Mary Uduk said: “SEC has come up with a two-pronged approach to address the intractable challenges associated with share transmission, which involves developing rules that will stipulate the time-frame for the transfer as well as the fee structure.

https://newlive.vanguardngr.com/2018/11/nse-moves-121-26m-shares-worth-n1-58bn-in-bearish-trading/

“Also, the Commission will engage Probate Registry around the country as part of the process with a view to enlighten them on the workings of capital and reduce the cumbersome process.

“We had meeting with registrars some time ago and a lot them complained about the problem they had at the Probate Registry. So, we thought that in the same way we have been engaging with judges when we have Judges Conference we enlighten them about the workings of the capital market and importance of it, we thought that we should also extend the same measure to the Probate Registry around the nation so that capital market issues will be attended to as soon as possible.”

https://newlive.vanguardngr.com/2018/11/sec-extends-deadline-for-shareholding-consolidation-by-one-year/