By Haruna Salami
The Securities and Exchange Commission, SEC has stated that it is not against the proposal by the Federal Government to set up unclaimed dividends and balances trust fund.
This was disclosed by the Head, Securities and Investments Services, SIS Department, SEC Mr. Abdulkadir Abbas while making clarifications on the Commission’s presentation at the one-day Public Hearing on the Finance Bill, 2020 at National Assembly, Abuja.
He said the Commission is requesting to be allowed to continue to “constructively manage the issue of unclaimed dividends for the development of the nation’s capital market.
“Dividends are cash rewards that a company gives to its shareholder”, he said.
“We are not against the proposal to set up unclaimed dividends and balances trust fund. Our concerns are with respect to the governance structure of that proposed fund and that is why we are asking for reconsideration. We are advocating modifications of the provisions with regards to management and governance of the trust fund to avoid possible harm to the capital market which is still struggling to survive.”
“SEC being the capital market regulator and mandated by the Investments and Securities Act to protect the interest of the investors, to be the one to administer or to manage or to supervise the operations of that fund, that is what we are requesting”.
Mr. Abbas, who represented the Director-General of the SEC at the Public Hearing assured the Senate that, the SEC would continue to monitor the compliance of the rules and regulations on the treatment of unclaimed dividends adding that its ultimate objective is to pool unclaimed dividends into a well-structured and well-governed Fund with independent management under the existing National Investor Protection Fund, NIPF, as found in other jurisdictions like Kenya and India.
He added that, alternatively, the unclaimed Dividends Trust Fund could be set up as an independent Fund to be managed by the private sector (Professional Fund Managers) under the supervision of the Commission.
However, the Independent Shareholders Association of Nigeria, ISAN is vehemently opposed the Unclaimed Dividends Trust Fund.
Presenting the position of ISAN at a one day public hearing on the proposed Finance Bill, 2020 before the National Assembly Thursday, Sunny Nwosu, Cordinator (Emeritus), ISAN said the proposal to transfer unclaimed dividends into a Trust Fund to be set up and managed by the government will discourage investment.
According to Nwosu “the government has taken its own 10% and has no right over investors’ money”.