With effect from Monday, investors in the Nigerian capital market are to pay for the registration and enrolment of their shares, the Securities and Exchange Commission, SEC, said on Tuesday.
Acting Director General of SEC, Abdul Zubair, said on Tuesday in Abuja that this followed the expiration of the December 31, 2017 deadline for free registration offered to investors to regularise their investment portfolios.
Mr. Zubair, who was presenting an update on ongoing Capital Market initiatives led by the regulatory authorities, said all investors that were yet to enroll their stocks in the market were, henceforth, to pay N150 for every investment to be registered.
Prior to the deadline, the SEC boss said the Commission spent about N3.15 million to underwrite the registration of the shares of about 2.1 million investors who have so far registered under the scheme.
“With effect from January 1, 2018, the SEC will no longer underwrite the cost of regularising investors’ shares in the stock market,” Mr. Zubair said.
He urged investors to continue to approach their banks or registrars to give their mandate to enable them collect electronically their dividends, including unclaimed dividends, not exceeding 12 years of issue.
He explained that investors would not be demanded to pay the N150 cost of registration at the point of registration or submission of the completed e-dividend mandate forms, but through their fully funded accounts with their banks after the mandate had been approved.
“If the investor’s account with his/her banks is not funded, approval for enrolment or registration will not be approved, till the investor the account is funded,” he said.
On forbearance of multiple accounts consolidation, Mr. Zubair said the Capital Market regulator approved the extension of the deadline till March 31, 2018, to encourage many more investors to consolidate their multiple subscriptions into one account.
Consequently, he said investors in the capital market who bought shares of the same company during the public offer using different names were allowed to continue to approach their stockbrokers or registrars to regularise their shareholdings, in line with SEC Rules on customer identification.
After the March 2018 deadline, the SEC DG said all shares not regularised, shall be transferred to the Capital Market Development Fund, CMDF.
Although all dividend payment warrants issued before December 31, 2017 by the various registrars remained valid, the Director in charge of External Relations, Henry Rolands said the commission has already directed that further issuance of dividend paper warrants be stopped from January 1, 2018.
“For the avoidance of doubt, all paper dividend warrants issued up till December 31, 2017 remain valid and should be honoured. Banks and Registrars are accordingly implored to please note and adhere,” he said.
Mr. Rolands said SEC consulted other interest groups, including the Central Bank of Nigeria, CBN and commercial banks to ensure the process did not experience challenges.
The e-dividend registration exercise, which began in November, 2015, was introduced by SEC to curb the high incidences of unclaimed dividends in the Nigerian capital market.
To enable investors take advantage of the initiative, an electronic platform was created for all investors to search for their names and get registered.
Initially, the commission had given June 30, 2017 as the initial deadline to phase out issuance of physical dividend warrant, to mitigate the risks associated with physical dividend warrants, to improve investors’ experience.
The exercise is expected to continue indefinitely throughout the life of the investor.
On the forensic audit of the finances and operations of indigenous oil firm, Oando Plc, Mr. Zubair said the exercise was still on course, despite its inability to commence the exercise on schedule.
The audit was originally scheduled to commence on December 6, 2017. But, more than three weeks after the announcement, it is yet to begin.
“The audit is on course. We had a little challenge, which had to do with the court case. But, now that the court has given its ruling, the challenge has now been resolved. We are ready to commence the audit any moment,” he said.
He did not say exactly when that would be.