SEC, Securities and Exchange Commission

•Sets N10bn limit for digital assets offering

By Obas Esiedesa

The Director General of the Securities and Exchange Commission, SEC,  Mr. Lamido Yuguda,  has blamed the rising number of unclaimed dividends on the investors’ failure to mandate their accounts as dividends are now paid electronically.

Yuguda who stated this during an interactive session with journalists, said unclaimed dividends are now paid into the  Unclaimed Dividends Trust Fund.

He however explained that any investor who comes forward and mandates his/her account would be paid immediately.

According to him,  “The reason why the number may be going higher is because a lot of investors have not mandated their accounts.

“Dividends are now distributed electronically, so dividends go directly into the investors account and if everybody mandates their accounts there would be little unclaimed dividends in the system.

“SEC has invested a lot of resources and has embarked on a number of programmes on investor education to ensure that people mandate their accounts.

“This process is still open and can be done with the registrars, forms can be obtained from the banks too and it’s a very simple process. We also have on our website a tool that assists the investors to determine any unclaimed dividends that they have”.

The SEC boss encouraged “investors to take advantage of these tools or to directly speak to the complaints section of the SEC and we would guide that person appropriately.

“You should remember that unclaimed dividends have now gone into the new Unclaimed Dividends Trust Fund that is managed by the Debt Management Office. So there are lots of developments in that area and SEC is now not the only party that has this unclaimed dividend.

“There are a lot of people who are getting their unclaimed dividends paid to them from the Trust Fund and we will not immediately have the information”, he explained.

On how the unclaimed dividends fund works, he said: “There is an Unclaimed Dividends Trust Fund at the moment and it has a framework whereby dividends that have not been claimed over a certain period are transferred to this Fund and it will be utilized in line with the investment objectives of that Trust Fund.

“However, if anybody comes forward at any given time to claim their unclaimed dividends, this fund will be able to repay these dividends without any problems.”

In another development, SEC at the weekend pegged the maximum amount to be raised from Digital Assets Offering within any continuous 12 month period at N10 billion.

  The Commission in a statement in Abuja said the limit which is contained in its New Rules on Issuance, Offering Platforms and Custody of Digital Assets would apply to all issuers seeking to raise capital through digital asset offerings.

  It defined “Digital Asset as a digital token that represents assets such as a debt or equity claim on the issuer; and included in Initial Coin offering and other Distributed Ledger Technology offers of digital assets”.

  According to the Commission, “The New Rules state that the issuer must demonstrate that the gross proceeds to be raised from the digital asset offering would be sufficient to undertake the project as proposed in the white paper.

  “An issuer may only raise funds subject to the following limit: Twenty times the Issuer’s shareholders’ funds i.e., the maximum quantum of funds permitted to be raised within any continuous 12month period, subject to a ceiling of N10bn or any other ceiling as the Commission may determine from time to time. 

  “The issuer shall demonstrate that the gross proceeds to be raised from the digital asset offering would be sufficient to undertake the project as proposed in the white paper.

  “In the event that the amount raised is below the soft-cap, the Issuer shall refund all monies collected from the token holders within five business days from the offer closing date”.

On the investment limit, the Commission stated that a person may invest in an initial digital asset offering subject to the various limits.

For qualified institutional and high net worth investors, it noted that there will be no restriction on investment amount.

  For  retail investors, the SEC fixed a maximum of N200,000 per issuer with a total investment limit not exceeding N2 million within a 12-month period

“A person may invest in an initial digital asset offering subject to the following limits: 

“For qualified institutional and high net worth investors, no restriction on investment amount; and for retail investors, a maximum of N200,000 per issuer with a total investment limit not exceeding N2 million within a 12-month period”.

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