The Senate Committee on Capital Market, alongside the Security and Exchange Commission (SEC) and other capital market stakeholders, convened on Monday to formulate practical strategies to address the issue of unclaimed dividends in Nigeria. This consensus emerged from a one-day public hearing organized by the Senate panel, aimed at finding a lasting solution to the problem.
Shareholders at the forum proposed further amendments to the Finance Act and emphasized the need for proper sensitization about SEC’s activities. They also mandated SEC to leverage modern technology to identify owners of unclaimed dividends and compile comprehensive data.
Participants agreed that the SEC Director-General, Dr. Emomotimi Agama, should, within the next six months, present to the Senate panel the necessary strategies for reclaiming unclaimed dividends managed by the Debt Management Office (DMO). Stakeholders argued that the DMO should not retain the 10 percent of the fund as currently authorized by the Finance Act.
Opening the event, Senate President Godswill Akpabio highlighted the forum’s objective to identify the root causes of unclaimed dividends and devise a path that empowers investors, protects their interests, and unleashes the full potential of the capital market.
Senate panel Chairman Osita Izunaso emphasized the need for legislation to instill confidence in the capital market. He remarked, “The capital market thrives on trust. Since the crash of the capital market in 2018, confidence has waned.
It is our collective responsibility to restore this trust, whether as stakeholders, parliamentarians, or shareholders.”Izunaso noted that declared dividends alone amounted to N5 trillion over five years, averaging N1 trillion annually, indicating a significant potential if the market is further promoted.
He challenged the SEC DG to intensify efforts to identify owners of unclaimed dividends through extensive enlightenment campaigns.
Izunaso stressed the importance of strengthening Know Your Customer (KYC) requirements, simplifying the account update process, and possibly creating a comprehensive website for shareholder information. He also underscored the necessity of addressing inadequacies in financial institutions’ infrastructure and leveraging technology.
He added that the National Assembly must amend the Finance Act to delineate the roles of various institutions, ensuring that the SEC and relevant bodies manage unclaimed dividends, rather than the Central Bank of Nigeria (CBN).
Izunaso also suggested that the Minister of Finance should not chair such institutions due to the demanding nature of their primary role.
Overall, the discussions aimed at creating a more efficient framework to manage unclaimed dividends and bolster investor confidence in Nigeria’s capital market.
