By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Nigeria’s Securities and Exchange Commission (SEC) is proposing to return unclaimed dividend to paying companies within 12 months, according to the commission’s proposed amendment of new rules on its official website.
SEC affirmed that all unclaimed dividends in the custody of the Registrars shall be returned to the paying company twelve (12) months after the date of approval of dividends at a general meeting (for final dividends) or a board meeting (for interim dividends) and evidence of remittance forwarded to the Commission within 24 hours.
The commission in the proposed new rule added that where dividends are returned to the company unclaimed, the company may invest the unclaimed dividend for its own benefit in a guaranteed income investment outside the company and no interest shall accrue on the dividends against the company.
“Unclaimed dividend shall not be used by the company for its own business except in accordance with provisions of CAMA,” the proposed rule states.
Also, the commission said a company may retain a minimum of five percent (5%) of the unclaimed dividends in cash or near-cash for the purpose of remittance to the Registrars upon request for payment.
SEC says all accrued interests from the failure of Registrars to remit the unclaimed dividends within the time limit prescribed in these Rules and Regulations shall be remitted along with the unclaimed dividend to the paying company.
“The accrued interest shall be calculated at a rate not below CBN treasury bills (TB) + 5%,” the commission added.
The proposed new rule also stated that erring Registrars who fail to remit unclaimed dividends to the paying company as suggested shall attract a penalty of N5 million and an additional sum of N100, 000 for every day such contravention persists”.
According to SEC, the responsibility of paying dividends to a shareholder after the dividends have been returned to the company shall lie with the Registrar.
“Paying companies shall remit the portion of unclaimed dividends claimed by a shareholder(s) to the Registrar within 48 hours of receiving a request/claim for payment,” the proposed new rule noted.
On the contrary, failure by the paying companies to comply with the above provision shall attract a penalty of N1 million in the first instance and N100, 000 for every day such contravention persists.
While Registrars who fail to comply with the above provision will attract a penalty of N2 million in the first instance and N500, 000 for every day such contravention persists”.
Similarly, SEC proposes to use the Independent National Electoral Commission (INEC) voter’s registration card as a valid means of identification of individual clients in the Capital Market.
