THE Securities and Exchange Commission (SEC) has asked companies and their registrars who default on paying unclaimed dividends to shareholders to honour the provisions stated in the Finance Act 2020.

The apex regulator in the capital market issued a directive in a statement on Tuesday, June 10, and also stated that shareholders can now claim up to 12 years of unclaimed dividends.

It said its directive aligns with Section 60 of the Finance Act 2020.

“The attention of the Securities and Exchange Commission has been drawn to the fact that paying companies and their Registrars have continued to treat unclaimed dividends of public companies that are older than 12 years as being “statute-barred” without recourse to the provisions of the Finance Act 2020.

“Pending the setting up and operationalisation of the (Unclaimed Fund Trust Fund), UFTF by the Federal Government, under its powers under Sections 3 (4) (e) and 93 of the Investments and Securities Act 2025, the Commission hereby directs public companies and their Registrars to continue to honour all requests by shareholders for the payment of unclaimed dividends as described above, with effect from December 31, 2020,” it stated.

The SEC stressed that public companies and registrars are required to effect immediate compliance with this directive and submit periodic reports on the same in the manner prescribed in the Commission’s rules and regulations.

It clarified that the import of the provisions of Section 60 of the Finance Act 2020 is that where dividends declared by a publicly quoted company on the Nigerian Exchange Limited remained unclaimed for six years or more, such dividends are expected to be transferred to the Unclaimed Funds Trust Fund (UFTF).

The fund is to be held in trust and managed by the government until the shareholder presents a claim for the unclaimed dividends.

As such, it explained that shareholders are entitled to continue to claim dividends that were not statute-barred, that is, not more than 12 years before December 31, 2020, when the Finance Act 2020 came into effect.

The commission had claimed that the lack of proper identification of investors is a key factor contributing to unclaimed dividends, despite the launch of its revamped e-dividend mandate management system (e-DMMS) portal in June 2024, aimed at curbing the growth of unclaimed dividends.

The portal e-DMMS features a self-service interface, allowing investors to mandate their accounts for e-dividend virtually without visiting a registrar or bank.

The ICIR had in November 2023 reported that the SEC’s new e-dividend mandate portal might fall short of expectations if certain flaws are not addressed.

Over the years, the SEC has failed to curb the escalating issue of unclaimed dividends in the capital market, as the figure keeps rising.

At his first Capital Market Committee (CMC) meeting in Lagos, upon assumption of office, the SEC director general, Emomotimi Agama, disclosed that the total unclaimed dividend in Nigeria’s capital market has risen to N215 billion as of March 2024.