Unclaimed dividends will no longer have unlimited lifespan. The Securities and Exchange Commission has just declared that after 12 years, all unclaimed dividends will be forfeited to the Nigerian Capital Market Development Fund.
This is contained in a statement introducing a proposed new rule the SEC is about to introduce -‘Proposed rule – Rule on application of 12 years and above unclaimed dividend’
According to the new rule:
“Companies and Registrars in custody of dividends which remain unclaimed by shareholders 12 years after the date of declaration or subsequently attain the 12 years threshold shall upon the coming into effect of this Rule transfer such monies into the Nigerian Capital Market Development Fund (NCMDF)”.
“All companies and registrars shall not later than 30 days after the end of every calendar year forward to the Commission a report of unclaimed dividends in their custody, which shall specify compliance with Sub Rule (1) of this Rule”.
“Companies shall disclose details of compliance with this Rule in their annual reports”.
Capital markets operators and stakeholders who want to make inputs into the proposed rule must “forwarded to the Secretariat, Rules Committee of the Commission, via, firstname.lastname@example.org or through the DG, SEC, not later than two (2) weeks from the date of publication”.
Unclaimed dividends have become a problem to the SEC and registrars. This new rule would further serve as a motivation for shareholders to claim their dividends.