SEC To Penalise Banks For Charging e-Dividend Registration Fees
Securities and Exchange Commission, SEC, is to penalise Deposit Money Banks and Capital Market Registrars for charging fees in the on-going e-dividend registration exercise. Nigeria small investors’ unclaimed dividend currently stands at about N90 billion. Investigations revealed that SEC had been inundated with complaints from shareholders who heeded the campaign and went to banks and registrars to register for their e-dividend. It was learnt that some registrars bluntly refused to register shareholders. Their reasons ranged from lack of internet connectivity, inadequate instruments, non-availability of e-registration forms, to waiting for directives from their headquarters. It was learnt that some banks were charging as much as N1, 200 to register each shareholder.
Charging fees, under any guise for the exercise clearly contravenes the regulations SEC which has been campaigning that the registration exercise was free for the first 90 days. The exercise started on December 14, 2015. Even if a shareholders were to go to any bank of Registrar for the registration, at the expiration of the initial 90 days, what SEC regulation provides for would be to pay a fee of N100, only. It was learnt that the management of the SEC was furious and had decided to summon the banks and registrars, with a determination to make it abundantly clear that it viewed every infraction in the exercise seriously and would not hesitate to penalize any organisation that decided to collect unauthorized charges from shareholders.
The push for e-dividend, which would enable shareholders collect their dividend through their banks, is being undertaken by SEC, in collaboration with the Central Bank of Nigeria, Nigeria Inter-Bank Settlement System Plc, NIBSS, Committee of Heads of Bank Operations and the Institute of Capital Markets Registrars, ICMR. It was learnt that quoted companies and their Registrars were in a league with banks to frustrate the e-dividend registration exercise in order to continue to keep the huge unclaimed dividend. The e-dividend registration exercise is expected to eliminate the practice whereby companies and their registrars hold to shareholders’ dividend on claims that the owners failed to come forward for their dividend.