The Securities and Exchange Commission (SEC), Nigerian apex capital market regulator has endorsed the introduction of e-dividend payment system in order to eliminate unclaimed dividend by shareholders which has risen to over N19 billion.

To this extent, the Commission has formerly approved the modalities for the successful implementation of the e-dividend with the collaboration of Central Securities Clearing System (CSCS), Nigerian Interbank Settlement System (NIBSS), Registrars, Banks and shareholders of quoted companies.

Speaking at a press briefing in Lagos weekend, Director, Research and Planning, SEC, Mr. Sylvester Akele disclosed that the e-divided payment system would automatically allow dividends to be credited directly into shareholders accounts within 24 hours of payment by the company.

According to him “Under this system, companies are encouraged to meet the obligations of dividend payment as at when due, and all parties that will be involved in the implementation process are encouraged to remain dedicated and fully involved. Companies that fail to meet payment obligation immediately after Annual General Meeting (AGM) will be sanctioned.”

He disclosed that the e-dividend payment system would be launched by the Hon. Minister of Finance, Dr. Shamsudeen Usman in Abuja on February 28, 2008.  “ The launching is the result of the effort of stakeholders- SEC, CSCS, Central Bank of Nigeria (CBN), Corporate Affairs Commission (CAC), NIBBS, Stockbrokers, Registrars, Tax authorities, Banks, Issuers and shareholders Association etc to frontally tackle the problems of unclaimed dividends which has adversely affected confidence in the market, he added.

Under the modalities for the e- dividend payment system, Akeke said “Registrars are to collate bank accounts from shareholders. Registrars and NIBBS to prepare a standard e-dividend payment data and form which would be completed by shareholders. Banks to authenticate the e-dividend data forms. Registrars are to submit banks’ details to NIBBS.

 NIBBS would link Registrars to NIBBS server via PC, digital line and prescribed modem. Registrars to process divided net of tax, on payment date and withholding tax paid to special account at FIRS or State Board of Internal Revenue, as the case may be.”

Commenting further on the modernity of the e payment system, he said “NIBBS will further very data integrity. They will submit the file within 24 hours to all banks in Nigeria to enable the accounts of the named e-dividend beneficiaries to be credited. Upon receipt, the banks will credit the beneficiaries’ accounts within 24 hours. NIBBS would forward a compliance report to SEC within 24 hours. Any un-applied funds (for any reason e.g. dormant account) shall be returned to the Registrars within 24 hours.”

The SEC director noted that the Commission has been saddled with the responsibility of ensuring that rules and guidelines on e-dividend is released to all stakeholders; Roll out enlightenment programmes ;  Direct Registrars to put Information and Communication Technology (ICT) infrastructure, Direct companies to incorporate e-dividend in their AGM and organise formal launching of the e-dividend payment system.