Securities and Exchange Commission (SEC) might lead efforts to remove the 12-year ceiling on recovery of unclaimed dividends, paving the way for shareholders to be able to retrieve their unclaimed dividends irrespective of the time-line.
Extant laws currently place a 12-year statute bar on unclaimed dividends, after which the shareholders forfeit the rights to the dividends and the unclaimed funds revert to the companies that made the payment.
But SEC, as part of a basket of initiatives aimed at enhancing market integrity and deepening participation, especially by domestic investors, is considering a review of the 12-year limit.
SEC is finalising the list of a highly influential advisory group that will serve as advocacy front to lobby for legislative and policy changes. The advisory council will be mandated to engage the National Assembly, Judiciary and the Federal Executive Council on key changes necessary to enhance the growth of the market.
“It is something that we need to look at as we move forward,” director general, Securities and Exchange Commission (SEC), Mr Mounir Gwarzo said when asked about the 12-year limit on unclaimed dividends.
He said the commission had earlier led an effort to change the statue bar because it believed that the 12-year bar is not good for the investors in the market and unclaimed dividend should be such that a shareholder should be entitled to claim his dividends if he comes around with evidence that he owns the shares.
Unclaimed dividends currently stand at about N80 billion.
SEC had recently taken several steps to address the issue of unclaimed dividends. The apex capital market regulators recently directed all registrars of public limited liability companies to return all unclaimed dividends, which have been in their custody for 15 months and above to the companies that paid the dividends.
In a circular dated June 1, SEC gave the registrars up till June 30, 2015 to comply and file evidence of remittance of the unclaimed dividends to the companies with the Commission. SEC last week confirmed that about 70 per cent of the registrars have complied while the remaining registrars have written to seek for further consideration.