SEC seeks removal of 12-year statute cap on unclaimed dividends

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The Securities and Exchange Commission (SEC) on Wednesday advocated the removal of the 12-year Statute of Limitation on unclaimed dividends to enable shareholders claim their dividends in perpetuity.

The submission was based on the report of a committee set up in 2016 to review the issue which had been passed to the Senate Committee on Capital Market.

According to a statement by the SEC spokesman, Naif Abdussalam, the Commission also wants the establishment of a Trust Fund as a corporate body, with a Board of Trustees.

The Commission stated that the board should administer unclaimed dividends, while the Fund should be managed by an independent manager.

The submission, made at a Senate committee’s public hearing on the market, advocated that members of the board should be selected from the capital market with representation from some institutions.

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The institutions include the Federal Ministry of Finance, SEC, Institute of Capital Market Registrars, shareholders association recognised by the commission and Nigerian Employees Consultative Association.

“Upon establishment of the Fund, the Minister of Finance shall issue a directive for all forfeited unclaimed dividends domiciled with the companies and all subsequent unclaimed dividends, 15 months and above to be paid into the fund.

“It shall be the responsibility of the Securities and Exchange Commission to enforce this directive.’’

The statement said the effort was aimed at addressing the current lacuna on unclaimed dividends in the Nigerian Capital Market.

Other institutions which made submissions at the forum included the Corporate Affairs Commission, Institute of Capital Market Registrars, The Nigerian Stock Exchange and Shareholders Associations.

Abdussalam added that the participants “alluded to the fact that the viable option of injecting these forfeited unclaimed dividends into the economy was through the establishment of an Unclaimed Dividend Trust Fund’’.

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Addressing the forum, the Director-General of SEC, Mr Mounir Gwarzo, said “going by the practices in other jurisdictions, we believe that it is apt for the Nigerian capital market to have a platform for the utilisation of unclaimed dividends funds”.

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