Don't Miss


Home   >   Nigerian Stock Exchange   >   CMC moves to end era of unclaimed dividends

CMC moves to end era of unclaimed dividends

By on June 27, 2014

The Capital Market Committee has intensified efforts to resolve all issues regarding unclaimed dividends in the country, the Director-General, Securities and Exchange Commission, Ms. Arunma Oteh, has said.

According to her, the CMC is also working on ways to boost securities lending and resolve other issues holding the country’s capital market from realising its full potential.

Oteh said these in Lagos on Wednesday at the 2014 second quarter CMC meeting.

The DG, who said the CMC welcomed the agenda articulated by the new Central Bank Governor, Mr. Godwin Emefiele, explained that the support of the Central Bank of Nigeria was vital in eradicating unclaimed dividends; as is the conclusion of the share dematerialisation process.

In the course of the meeting, she said some of the things that the CBN could do better support the capital market and investors were highlighted.

One of them, she explained, was for the CBN to get all banks to allow retail investors to have dividends going into their savings accounts as well as their current accounts.

She added, “We know some banks already do this. But we hope that the central bank will get to a point where it can direct all banks to allow this to happen. It is very critical even as we tackle the unclaimed dividend issue.

The SEC DG explained that the dematerialisation of share certificate would also go a long way in tackling unclaimed dividends.

Dematerialisation is the process of converting paper certificates into electronic format, after which official records of shareholders of all listed companies will be held and maintained by the CSCS.

According to Oteh, the dematerialisation of share certificates will soon be executed as the sub-committee set up for the project has come up with recommendations on how to go about it.

She added, “There will be data migration issues but we will address that. The process will also cover unlisted companies that trade on the OTC market as well”

The Acting Manging Director, Central Securities Clearing System, Mr. Joe Mekiliua, added that the template for the dematerialisation of share certificates had been prepared and that the CSCS was ready to handle the project.

The Executive Director, Market Operations and Technology, NSE, Mr. Ade Bajomo, stressed that the issue of unclaimed dividend had been top on the CMC’s agenda for a long time and various committees had been set up to come up with ways in which it could be resolved.

He explained that with the steps outlined by the committee, the issue would soon be a thing of the past.

On the planned demutualisation of the Nigerian Stock Exchange, the Chief Executive Officer, Mr. Oscar Onyema, said the process was ongoing and that the Exchange was working very hard to achieve it.

“The Committee of Council is working on it but you cannot do this on a vacuum but within certain legal construct to make it credible, so we are working with various entities to get the framework to move forward.”

On securities lending, Onyema said, “Securities lending started with market makers in 2012, the framework is there and the way we structured securities lending is designed to address risk, we have made provisions for securities lending agent, there is no way you will do securities lending transaction without an agent.”

“A number of the agents have been registered with the NSE but have not taken up operations and we are trying to address the concerns in order for them to actually function as securities lending agents.”

The CMC comprises all market stakeholders and at Wednesday’s meeting, members of the executive teams of the Nigerian Stock Exchange, NASD OTC, FMDQ OTC, Securities and Exchange Commission, trade groups and CMC sub-committees, among others were present.

 

 

[Punch]