The Securities and Exchange Commission (SEC) recently announced that the e-dividend registration would continue seamlessly in spite of the expiration of free registration deadline.
The Commission also enjoined investors yet to enroll, as the free registration ended last month, to continue with the registration at a cost of ₦150 only.
Acting Director General of SEC, Dr. Abdul Zubair, who made the announcement at a press briefing, said “investors should continue to approach their banks or registrars, as usual, to seamlessly mandate their bank accounts for the collection of their dividends electronically, including unclaimed dividends, not exceeding 12 years of issue; as the N150 would not be demanded from them at the point of registration.
Although, SEC said that the ₦150 fee would not be demanded from the investors at the point of registration or submission of completed e-dividend mandate forms, divergent views have begun to trail the Commission’s stance that investors yet to register are to bankroll the exercise at a marginal cost of ₦150.
Some shareholders groups argued that the idea of collecting ₦150 from for e-dividend registration is fraudulent because the companies is paying registrars for services rendered and did not see any need of paying another money while others believed the concept of e-dividend is beneficial to shareholders and urged SEC to continue its campaign on the initiative irrespective of the Commission’s stoppage of bearing the cost of the registration process.
Specifically, Gbadebo Olatokunbo, shareholder activist and co-founder Nigeria Shareholders Solidarity Association (NSSA) argued that all the Commission has been doing for taking the cost of e-dividend registration all along was making money for the banks.
Hear him, “There is no sense in what SEC is saying because it has been making money for the banks all along, they were not bankrolling anything. The purpose of commercial banks is to collect money to channel into proper use and one cannot channel what he/she doesn’t have. So, what is SEC bankrolling? What are their arrangements? Secondly, if SEC is after reducing unclaimed dividend and not deceiving itself or the public, I don’t think there should be a limitation to the time of what it is doing to ensure that.”
Continuing, he said, “It is the registrars department that is not doing what they ought to be doing. Why introduce the platform of shareholders paying money? What is the cost in the first instance? It is high time for SEC to be probed because this idea that people will be paying money for e-dividend is fraudulent because the companies is paying registrars for services rendered. So, why should shareholders pay money again”, he asked.
He pointed out that part of the problem the market is facing is regulators making some policies without proper consultations adding that as far as he is concern, the idea of deducting ₦150 from shareholders for e-dividend registration is not acceptable.
Sunny Nwosu, founder, Independent Shareholders Association of Nigeria (ISAN) speaking in the same vein, charged SEC to continue whatever it is doing before to ensure shareholders key in to the e-dividend and bring down the volume of unclaimed dividend. He explained that, tasking a ₦150 on shareholders as registration fee does not make an investment sense rather increasing the burden of minority shareholders.
“I think that SEC should continue to do what they are doing in ensuring the capital market is sensitized on the e-dividend issue. If you want to have a successful reformation, one has to be patient, I am not against the threat of deadline, deadlines don’t work and you cannot at the same time increased the cost of investment by asking investors to bank roll the cost of registering for e-dividend. So someone’s whose dividend is ₦100 will pay ₦150 for registration, he asked. The person will decide to leave his or her dividend thereby increasing the volume of unclaimed dividend.”
He explained that the regulators contribute to reasons why some companies delist from the market because of the way they take their decisions.
“Taking some decisions without weighing what the impact would be on the market or companies listed on the Exchange are why some companies want to delist. So, it is important for regulators to look at whatever they want to bring to the market”, Nwosu said.
On his own part, Mr. Moses Igbrude, ISAN Secretary noted that the decision of the SEC to stop bank rolling the registration fee of e-dividend is okay but the apex regulator should not relent in its campaign of the new initiative.
He said, “The e-dividend is a new process, a concept which is good and is beneficial to shareholders and to the market. It is a new system meaning that we are going technological now but then, it is not when you introduce a new system to the country after sometime you now relax, it must be continuous and one must monitor it and its implementation. For instance, those ones who have registered, have they been able to get their money? If the regulator did not monitor these processes, unclaimed dividend would increase more because we have seen a situation where some people registered for e-dividend are still complaining for thing or the other
“The decision taken by SEC to stop bank rolling the process is okay but we must keep monitoring it as well as its implementation otherwise it becomes a forgotten issue. As for me, I have nothing against the fee but the e-dividend campaign must continue without a deadline.”
However, the President, Constant Shareholders Association of Nigeria, Shehu Mallam Mikail, said SEC has tried in bearing the cost of e-dividend registration.
“Now, it is a matter of getting to let shareholders understand that e-dividend mandate is a continuous process but they need to pay for the service. My major concern is that SEC should not touch any unclaimed dividends, which are yet to be claimed by shareholders, instead, it should be reverted to the company that declared the dividend.”
“The SEC should continue in its campaign on the initiative. By so doing, a lot of shareholders will key in to it and there has to be persistent information to the general public that people can still have their mandate”, Mikail stated.