Identity management and multiple subscriptions of investors has been attributed as the cause for Nigeria’s rising unclaimed dividends in the Nigerian capital market standing at N170 billion as of December 2020.

Stating this at the second post-Capital Market Committee (CMC) virtual news conference, Lamido Yuguda, Director-General of the Securities and Exchange Commission (SEC), said the figure had increased from N158.44 billion as of December 2019.

“We have problems with identity management in the Nigerian capital market and this is really one of the things the commission is trying to resolve,” Mr Yuguda said. He said this became an issue after the introduction of BVN because “BVN is tied to only one name.”

He noted that the commission constituted a Committee on Identity Management for the Nigerian Capital Market in June in order to address the unclaimed dividend issue.

The committee is chaired by Aigboje Aig-Imoukhuede and is expected to harmonise various databases of investors and facilitate data accuracy in the capital market.

“We are optimistic that the outcome of this committee’s assignment would address the challenges of identity management and help resolve some of the issues we face in the areas of unclaimed dividend, direct cash settlement and multiple subscriptions,” he added.

Further commenting on the issue of unclaimed dividends by investors, Mr Yuguda said, “There is a problem with the process but there is a problem with us too as people because if you are buying securities using your own wealth; why will you use another person’s name, why will you use a name that will not be traceable to you?”

On the Electronic Dividend Mandate Management System (e-DMMS) portal, Mr Yuguda said the total number of mandated and approved accounts from its inception in 2016 to July 2021 stood at 1,144,970, explaining that the COVID-19 pandemic affected registration.

He said members of the CMC had adopted some measures to increase the number of mandated investors on the e-DMMS and reduce the quantum of unclaimed dividends in the market. The measures are automation for mandating to e-DMMS, increased monitoring of adherence to procedures and increased awareness campaigns on the initiative.

Mr Yuguda added a training session would be organised by the Central Securities Clearing System (CSCS); to be supported by the e-DMMS technical committee, Institute of Capital Market Registrars (ICMR) and Association of Securities Dealing Houses of Nigeria.

He said a study to determine the suitability of the CSCS to process dividends of investors in unlisted companies would also be conducted.