During a one-day public hearing, the Senate Committee on Capital Market, the Security and Exchange Commission, and stakeholders in the capital market agreed to develop effective strategies to tackle the issue of unclaimed dividends in Nigeria.
Participants recommended further amending the Finance Act and emphasized the importance of raising awareness about SEC’s operations. They also urged SEC to utilize modern technology to identify owners of unclaimed dividends and create comprehensive data.
All attendees supported the directive for the Director-General of the Security and Exchange Commission, Dr. Emomotimi Agama, to submit strategies within six months on reclaiming unclaimed dividends held in the Debt Management Office.
Stakeholders criticized the DMO for retaining 10% of the unclaimed fund under the current provisions of the Finance Act.
In his opening speech, Senate President Godswill Akpabio stated that the forum aimed to identify the underlying causes of unclaimed dividends and devise solutions to empower investors and boost the capital market.
Chairman of the Senate panel, Osita Izunaso, emphasized the necessity of legislation to restore confidence in the capital market. He stressed the importance of rebuilding trust in the market post-2018 crash to attract investments.
Izunaso highlighted the significant total of N5tn declared dividends over five years, averaging N1tn annually, indicating the potential for increased revenue if market practices were enhanced.
He challenged SEC to intensify efforts in locating owners of unclaimed dividends through widespread awareness campaigns.
Izunaso called for strengthening Know Your Customer requirements and simplifying the account update process to streamline operations. He also suggested establishing a public-accessible website to provide transparency on dividend-related information.
The call to leverage technology for dividend identification was endorsed as a crucial step. Izunaso proposed amending the Finance Act to streamline the roles of regulatory bodies involved in dividend management.
“There is a need to segregate responsibilities among institutions to ensure efficient oversight. The Finance Minister’s role in such matters needs careful consideration to avoid inefficiencies,” Izunaso added.