By Chinenye Anuforo
FOR the first time in the history of any capital market in Africa, investors in the Nigerian capital market are now to get dividend payment within 24 hours through the e-Dividend Payment Platform.
The Director General of Securities and Exchange Commission (SEC), Mounir Gwarzo disclosed this at the e-Dividend Sensitisation Town Hall Meeting in Lagos.
According to him, the proposed system will automatically allow dividends to be credited directly into shareholders’ accounts within 24 hours of payment by the company.
Gwarzo stated that this was one of the initiatives being implemented by the Commission as part of its 10- year Capital Market Master Plan to encourage retail investors to return to the market and thereby deepen the market.
According to him “One of our strategies is to target the retail investor, the only way we can deepen the market and ensure that the market is within our own grip is to ensure that the retail investors come into the market. It is only the domestic investor that, no matter the condition of the market, will stay with us. What we have been experiencing in the market is the dominance of the foreign investors, where any time they want to move out of the market, they get out. And any time they want to come in, they do so. Seeing what happens in the market, we decided that the best thing is to get the retail investors and our approach is not to go to them and be telling them to come back.
“But our approach is to identify the issues why they are not in the market and deal with such issues. If you meet any retail investor, he is going to complain about not getting his dividend. So how do we address some of these issues? That brought about the issue of Road Show where we meet the retail investors’ one on one and tell them why they need to key into the e-dividend. It has been quite successful so far”.
“We have achieved something that is very unique. Even in South Africa, they have t+5, where, when you do transactions, you cannot get payment until five days. But with this system, we are going to achieve t+1 settlement system. You sell shares today, payment are effected within 24 hours which is going to be the first capital Market in Africa to do that. No market in Africa has experienced that before and we are determined to ensure that it is achieved.
He said it was because of the benefits which investors would obtain from e-Dividend registration that made the Commission decide to embark on the sensitisation campaign on the need for them to key into the e-Dividend platform by visiting their banks and registrars to complete the process.
The SEC boss assured investors that once the e-dividend platform is fully operational, the issue of stale warrant will be of the past. The issue of travelling from one place to another to deposit the warrant will be a thing of the past; the issue of change of address will also be eliminated.
“The issue of unclaimed dividend which, according to our records, is in excess of N80billion will also be a thing of the past. These unclaimed dividends came about from dividends of small stakeholders like you and me and we need to ensure that they are claimed.
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