SEC Cuts Cost, Timelines for Transmission of Shares – TheNigerialawyer

The Securities and Exchange Commission (SEC) Wednesday announced
a major step towards reducing the quantum of unclaimed dividends in
the Nigerian capital market and encouraging beneficiaries of
deceased investors to step up efforts to claim such dividends by
cutting the time, processes and costs of the transmission of shares
from a deceased to the beneficiary.

SEC believes this effort will ensure seamless transmission and
claim of the shares of the deceased by their heirs and
administrators.

To achieve the desired objective, the Commission, in an amended
draft on the operating framework for transmission of shares,
reduced the timeline for the transmission of shares of the deceased
from three weeks to one week.

Going by that, registrars shall ensure that shares of the
deceased are transmitted within a week of receiving the request
from the administrators or executors.

Acccording to the SEC in a statement released Wednesday, the
registrar is also required to transmit the Letter of Administration
to the Probate Registry within 24 hours of receipt of same for
verification.

The administrators/executors are however required to provide
letter of Introduction 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.

Also required are 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.

Others are copy of newspaper advert placed by the Court or
Gazette, any evidence of ownership of the investment–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.

“Where the Administrator/Executor cannot provide these
requirements, the Registrar may require confirmation through
insurance, indemnity or interview” the SEC stated.

“the fees chargeable for transmission of shares by registrars is
being limited to one per cent of the total value and additional
five per cent Value Added Tax (VAT) for shares of N5 million and
below and 0.5 per cent of the value and five per cent VAT on shares
above N5 million with a maximum chargeable amount of N200,000,
excluding VAT. Also, fees chargeable for confirmation of probate or
letter of administration shall not exceed N12,000.

Registrars are also disallowed from charging fee on
dematerialisation of share certificate and mandating of accounts
for electronic dividend. However, change of address, name or
mandate shall not attract more than N100 per request while update
of update of signature capture and scanning shall not be more than
N200 per signature.

The SEC further stated that any registrar that violates the
provisions of the rules shall be liable to a penalty of not less
than N1 million and an additional sum of N20,000 for every day the
violation persists.

The new rules also seek to standardise the turnaround time for
processing all requests for replacement and update from the date of
submission of all relevant documentations.

The turnaround time for dematerialisation is three working days,
update of signature capture and scanning shall take place in 24
hours while change of address, name and mandate shall be done
within two working days.

According to SEC, the amended draft rules would ensure
standardisation and efficiency in the transmission process, thereby
minimising conflict, protecting investors and maintaining the
integrity of the market.

The acting Director General of the SEC, Ms. Mary Uduk had
recently urged beneficiaries of deceased investors to step up
efforts to claim such dividends

Uduk stated that one category of investors whose investment
yields had contributed to the growth of unclaimed dividends in the
capital market were deceased investors.

According to her, beneficiaries of deceased investors as
indicated in the Will or Letter of Administration are yet to claim
the investments and accrued dividends through the share
transmission process.

“The capital market is a market for raising medium to long-term
capital via a number of instruments. The most popular of the
instruments are shared including bonds with resultant yields of
dividends and interests.

“However, the quantum of unclaimed dividends in the Nigerian
capital market has been on the increase as investors fail to claim
the dividends from their investment in shares,’’ she said.

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