Traders within the inventory market typically profit from capital appreciation, dividends, or each.
Whereas none of those is assured, over time, firms internationally have generated big returns for buyers, and the inventory market has proved to be a viable software for wealth creation.
One downside that has endured within the Nigerian inventory market is the issue of unclaimed dividends.
Yr after yr, the variety of unclaimed dividends continues to soar on account of inefficiencies within the system. This has eroded retail buyers’ confidence out there.
In June, 2025 the Securities & Change Fee printed a round whereby it clarified that by the provisions of the Finance Act 2020, the place dividends declared by a publicly listed firm stay unclaimed for six years or extra, they need to be transferred to the Unclaimed Funds Belief Fund to be held in belief and managed pending when a declare is made by the shareholder.
Moreover, shareholders are entitled to assert unclaimed dividends that weren’t statute-barred (above 12 years) earlier than December 31, 2020, when the Finance Act was enacted.
Usually, unclaimed dividends come up from:
The registrars of listed firms are their brokers answerable for the administration of basic conferences, conserving the register of members, and the fee of dividends declared by these firms. When a listed firm declares a dividend, the registrars course of the fee to the varied shareholders entitled to obtain them on the said fee date.
Nevertheless, some shareholders don’t obtain dividends years after they’ve been declared and paid, generally, because of the fault of the registrars. By regulation, an organization is anticipated to pay curiosity on the prevailing rate of interest on unpaid dividends after 3 months, the place the non-payment is the fault of the corporate. Sadly, many shareholders have no idea their rights, and even once they do, there is no such thing as a environment friendly redress mechanism for them to implement these rights.
Whereas some circumstances of unpaid and unclaimed dividends are real, others are merely because of the deliberate failure of registrars who unjustly withhold dividends for no cogent motive. In an period of technological development and regardless of the provision of a number of technique of identification, registrars nonetheless discover one excuse or the opposite to deprive shareholders of their dividends below the guise of an id verification train.
Even after visiting the workplace of registrars bodily, delays in funds persist. Some shareholders have accomplished the e-dividend mandate kinds a number of occasions, but their dividends are nonetheless withheld. The {financial} sector is one the place the worth of time needs to be extremely regarded due to the precept of time worth of cash.
Sadly, this seems to not be the case within the Nigerian capital market. Registrars have to automate their techniques to be extra environment friendly on this digital age. As well as, there’s a want for synergy amongst capital market operators such that when a broking account is opened, no extra type is required for dividends to be paid.
Through the years, the Securities and Change Fee has continued to decry the rise in unclaimed dividends. Nevertheless, the fee has been inefficient in resolving the scenario. Whereas the fee is at the moment centered on a crackdown on Ponzi schemes and unlawful funding operators, you will need to improve the operation of the inventory market, which is a authorized funding channel.
This may be achieved by creating an environment friendly administrative redress mechanism for aggrieved buyers with clear sanctions for erring registrars and steady enlightenment of buyers by way of varied channels. The fee must be extra proactive than reactive in addressing points referring to unpaid and unclaimed dividends.
There’s a want for a devoted desk and on-line portal to resolve complaints concerning unpaid and unclaimed dividends promptly. Presently, the criticism channel on the web site of the SEC isn’t efficient. Even complaints delivered bodily on the SEC Head workplace may go unattended for a number of weeks, months, and even go unanswered. That is unacceptable.
There needs to be minimal requirements and clear timelines inside which circumstances needs to be resolved. Many shareholders have deserted their dividends out of frustration as a result of there is no such thing as a clear mechanism for redress. In the end, if individuals can’t take pleasure in the advantages of their funding, there is no such thing as a justification for them to proceed.
Nigeria has change into a “template” for the inequitable distribution of wealth, benevolent crowdfunding, and help. In accordance with Oxfam,” Nigeria should free hundreds of thousands from poverty by constructing a brand new political and {economic} system that works for everybody”.
To make the Nigerian capital market a sexy funding possibility in comparison with betting and unlawful funding schemes, regulators have to do their job effectively and rid the market of incompetent and non-compliant registrars.
Teingo Inko-Tariah, Esq., is a Company Governance/Compliance Skilled. She may be contacted at [email protected]
