As part of efforts to ensure seamless transmission and claim of a deceased’s shares by heirs and administrators, Securities and Exchange Commission (SEC) has further reduced the time, processes and costs of the transmission of shares from a deceased to the beneficiary.
In an amended draft on the operating framework for transmission of shares, SEC has reduced the timeline for the transmission of deceased’s shares from three weeks to one week. Registrar shall ensure that shares of a deceased are transmitted within a week of receiving the request from the administrators or executors.
The registrar is also required to transmit the Letter of Administration to the Probate Registry within 24 hours of receipt of same for verification.
The executors or administrators shall however provide letter of introduction from the administrators and executors introducing themselves as the legal representatives of the estate. The letter should indicate the names, addresses, signatures and BVNs of the individual administrators and executors.
Also, administrators or executors shall provide original death certificate from the National Population Commission (NPC) for sighting, original probate letter or letter of administration for sighting or the certified true copy (CTC) from a Notary Public, copy of newspaper advert placed by the Court or Gazette, any evidence of ownership of the investment by the deceased such as the statement of shareholding from the Central Securities Clearing System (CSCS), original share certificates, dividend stub or dividend warrants or bank statement showing receipt of dividend into the account of the deceased.
SEC is also limiting the fees chargeable for transmission of shares by registrars to one per cent of the total value and additional five per cent Value Added Tax (VAT) for shares of N5 million and below and 0.5 per cent of the value and five per cent VAT on shares above N5 million with a maximum chargeable amount of N200,000, excluding VAT. Also, fees chargeable for confirmation of probate or letter of administration shall not exceed N12,000.
Registrars are also disallowed from charging fee on dematerialisation of share certificate and mandating of accounts for electronic dividend. However, change of address, name or mandate shall not attract more than N100 per request while update of update of signature capture and scanning shall not be more than N200 per signature.
Any registrar that violates the provisions of the rules shall be liable to a penalty of not less than N1 million and an additional sum of N20,000 for every day the violation persists.
The new rules also seek to standardise the turnaround time for processing all requests for replacement and update from the date of submission of all relevant documentations. The turnaround time for dematerialisation is three working days, update of signature capture and scanning shall take place in 24 hours while change of address, name and mandate shall be done within two working days.
According to SEC, the amended draft rules would ensure standardisation and efficiency in the transmission process, thereby minimising conflict, protecting investors and maintaining the integrity of the market.
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