Exposure Of A Proposed New Rule On Unclaimed Dividends
EXPOSURE OF A PROPOSED NEW RULE OF THE SECURITIES AND
EXCHANGE COMMISSION
New Rule
1. Proposed Rule on Unclaimed Dividends (E-Dividend Mandate)
PROPOSED NEW RULE ON UNCLAIMED DIVIDENDS (E- DIVIDEND
MANDATE)
Name/citation of the Rule(s)- E- DIVIDEND MANDATE
1. Rules on E-Dividend Mandate
a) These rules shall apply to all unclaimed dividends below 6 years.
b) All Registrars shall ensure that all mandated accounts are credited with
outstanding unclaimed dividends within 48 hours of receipt of the edividend mandate by shareholders.
c) Registrars shall forward a status report of all mandated accounts to the
Commission on quarterly basis which shall contain amongst others:
a) A list of requests by shareholders;
b) Number of requests processed;
c) Number of successful requests;
d) Number of unsuccessful requests with reasons.
d) Where a Registrar fails to comply with Rule 1 (b) and (c) of these rules and
regulations, such Registrar shall be liable to a penalty of a sum not less
than 25% of the unremitted amount and N50,000 for every day the
violation continues.
Justification:
To serve as a deterrent to Registrars and ensure prompt compliance. These
rules will also reduce the quantum of unclaimed dividends in the custody
of the Registrars as well as discourage Registrars from keeping unclaimed
dividends.
2. Reporting of income earned from unclaimed dividend:
a) All public companies to whom unclaimed dividends have been transferred,
after 15 months but less than 6 years, shall report in their Annual audited
account the bank balance (s), investment (s) and the earned income on
the unclaimed dividend funds, by way of note to the audited accounts.
Provided that the Registrars may also be required to make other reports
on unclaimed dividends as may be requested by the Commission from time
to time.
b) Failure by any public company to make such report shall lead to
appropriate sanction, including the forfeiture of the income to the
Commission for the year which the company failed to report.
c) Any company that fails to make the reports as required by Rule (b) shall
be liable to pay the sum of N10 Million as penalty.
Justification:
To ensure that there is full compliance by the beneficiary public companies
and to determine the contribution of unclaimed dividend funds in the
performance of the public companies.