Strong indications emerged on Monday that the Securities and Exchange Commission (SEC) would likely extend its free e-dividend registration for the third time.
This is due to low investor response as the February 28 deadline draws close.
A source who pleaded anonymity said in Lagos that the commission would likely extend the free registration deadline to give room for enrolment of more investors.
The source said that all indication pointed to extension due to low response of investors going by the available statistics.
Reports say that e-dividend simply refers to an online system of paying dividends to investors when companies declare dividends.
The dividends, which are the profits meant for investors, are wired to the investor’s bank account, instead of sending it by post as was the old practice.
The advantage of the e-dividend is not only to enable investors collect subsequent dividends electronically but it allows all accrued dividends to be credited to investors’ bank accounts.
This will stem the rising unclaimed dividends in the capital market.
The source said that the free registration might be extended for about three months, noting that the decision underscores SEC’s strong focus on market development and enhancement of investor confidence.
According to reports, SEC in June 2017, extended the underwriting cost of investors’ e-dividend registration to December 31, 2017, against the earlier underwriting deadline of June 30, 2017.
It also on January 18, extended the period for the free e-dividend registration to February 28, 2018, to encourage more shareholders participation in the initiative.
SEC said in a statement that the extension became necessary to encourage more shareholders mandate their bank accounts.
The statement said that in reviewing the progress of the e-dividend registration after the December 31, 2017 deadline, there was still a great influx of shareholders desirous of mandating their bank accounts for payment of dividends electronically.
In light of the foregoing, the SEC, as part of its developmental role, has extended the period for the free e-dividend registration till February 28, 2018, to encourage more shareholders mandate their bank accounts.
Accordingly, shareholders that are yet to register should continue to approach their banks or registrars to mandate their bank accounts for the collection of their dividends electronically, including unclaimed dividends, not exceeding 12 years of issue.
It would be recalled that the SEC had announced that the e-dividend registration would continue seamlessly in spite of the expiration of the initial December 31, 2017 free registration deadline.