SEC to Firms: Honour Unclaimed Dividend Demands

The Securities and Exchange Commission has directed all public companies and registrars to stop treating unclaimed dividends older than 12 years as “statute-barred”—especially those dating from before the enactment of the Finance Act 2020.

The SEC said the directive reaffirms the provisions of Section 60 of the Finance Act, which mandates that dividends unclaimed for over six years be transferred to the Unclaimed Funds Trust Fund (UFTF), where they remain accessible to shareholders pending claims.

The commission stated that shareholders are entitled to continue to claim their dividends that are not statute barred (that is not above 12 years) before December 31, 2020 “when the Finance Act 2020 came into effect.”

In a circular, the SEC said, “The attention of the Securities and Exchange Commission has been drawn to the fact that paying companies and their registrars have continued to treat unclaimed dividends of public companies that are older than 12 years as being “statute-barred” without recourse to the provisions of the Finance Act 2020.

“In response to various inquiries on the subject, the commission hereby clarifies as follows: The import of the provisions of Section 60 of the Finance Act 2020 (December 31, 2020), is that, where dividends declared by a public company quoted on the Nigerian Exchange Limited remained unclaimed for a period of six years or more, such dividends are expected to be transferred to the Unclaimed Funds Trust Fund (UFTF) to be held in trust and managed pending when the shareholder presents a claim for such unclaimed dividends.”

The commission therefore directed public companies and registrars to effect immediate compliance with the directive and submit periodic reports on same in the manner prescribed in the commission’s rules and regulations.