By Dipo Olowookere
In order to make transactions on the Nigerian capital market stress-free so as to improve participation, the Securities and Exchange Commission (SEC) is proposing to change some rules.
In a notice this week, the apex regulatory agency in the nation’s capital market said it wants to change rules on E-Dividend Mandate, Transmission of Shares and Direct Cash Settlement (Re-Exposure).
Concerning the e-Dividend Mandate rules, SEC is proposing to mandate registrars to credit accounts of shareholders of all outstanding unclaimed dividends within two days, explaining that this will “increase the rate of compliance by registrars and help to reduce the quantum of unclaimed dividends.”
Apart from the above proposed amendment, registrars will be under obligation to forward status reports on all mandated shareholders accounts on a quarterly basis so as to enable SEC monitor the level of compliance with the E-Dividend Mandate Management System.
SEC further said another amendment would be “where BVN is provided, Bankers’ confirmation shall not be required before shareholders’ accounts are mandated by the registrars to avoid unnecessary delay in mandating shareholders’ accounts.
“Any Registrar that violates the provisions of these Rules shall be liable to a penalty of not less than One (1) million Naira and an additional sum of N20,000 for every day the violation persists to serve as a deterrent to registrars for possible violation of the rule,” it said.
On the transmission of shares rules, the commission is proposing to have registrars transfer shares of a deceased within three weeks of receiving the request from the Administrators/Executors subject to the availability of “Letter of Introduction from the Administrators/Executors, introducing themselves as the legal representatives of the Estate. The letter should also indicate the names, addresses, signatures and BVNs of the individual Administrators/Executors; original Death Certificate from the National Population Commission (NPC) for sighting; original probate letter or Letter of Administration for sighting or the Certified True Copy (CTC) from a Notary Public; copy of newspaper advert placed by the Court or Gazette; and any evidence of ownership of the investment i.e. CSCS statement(s) of the deceased, original share certificates, dividend stub or dividend warrants or bank statement(s) showing receipt of dividend(s) into the account(s) of the deceased.”
SEC said, “Where the Administrator/Executor cannot provide these requirements, the Registrar may require confirmation through insurance, indemnity or interview.”
On what should be charged for cost of this transaction, SEC is proposing one percent of the value +5 percent VAT for a value of shares of N5 million and below; and 0.5 percent of the value subject to a maximum of N200,000 +5 percent VAT for a value of shares above N5 million.
View the full amendments HERE
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