SEC, NGX Group Advance Digital Overhaul to Address N190bn in Unclaimed Dividends

The Securities and Exchange Commission (SEC) and Nigerian Exchange Group Plc (NGX Group) have reaffirmed their commitment to the comprehensive digital transformation of Nigeria’s capital market. This initiative aligns with the goals outlined in the revised Capital Market Masterplan.

This is even as the fully digitised platform promised to resolve the growing unclaimed dividend that had risen to N190 billion.

Available statistics show that the unclaimed dividend was N190 billion in 2022 having risen from N177 billion in 2021. However, the new platform, when operational, is expected to, among others, ensure seamless payment of dividends to shareholders while possibly tracking those who had unclaimed dividends.

During a stakeholder engagement and press briefing session held at the Nigerian Exchange Group House in Lagos on Wednesday, 26 June 2024, both organisations detailed their collaborative efforts to develop a digital solution aimed at transforming the primary market equity capital-raising process. The focus of this initiative is on public offers and rights issues.

Subject to SEC approval, this innovative platform represents a significant advancement in digitising the capital-raising process for issuers. Stakeholders are expected to benefit from enhanced efficiency, streamlined due diligence capabilities, ease of use and accessibility, faster information dissemination, and seamless compliance with regulatory requirements, among other features.

Director-General of SEC, Dr Emomotimi Agama, addressed stakeholders, stating: “I would like to commend NGX Group and all partners on this development. This digital transformation initiative is a testament to our shared commitment to fostering an innovative, efficient, and reliable capital market, embedded in the Capital Market Masterplan. By leveraging technology, we can attract the younger generation of investors, enhance regulatory oversight, and create a world-class market.

“This digitisation will play a crucial role in setting a new standard for capital raising in Nigeria and enable the capital market to support the achievement of the US$1 trillion economy target of the current administration.”

Group Managing Director/Chief Executive Officer of NGX Group, Temi Popoola, emphasised the platform’s significance, stating, “This platform marks a pivotal moment in the evolution of the Nigerian capital market. With the support of the regulator and our stakeholders, we have developed an end-to-end digitised market infrastructure platform for distributing financial products, in this case, public offers and rights issues.

“I can assure the investing public that robust payment systems, comprehensive Know Your Customer protocols and strong fraud and risk management measures are fully integrated, ensuring that standard capital market intermediation is upheld without compromise.”

The digital platform aims to boost retail participation in the capital market, promote financial inclusion, and further deepen the pool of available capital. As banks seek to meet their updated minimum capital requirements through the primary markets, SEC and NGX Group have pledged to ensure an end-to-end streamlined process to assist banks and other issuers in achieving their business goals.

The collaborative effort between SEC and NGX Group marks a significant step forward in the modernisation of Nigeria’s capital market infrastructure, promising to enhance efficiency, transparency, and accessibility for all market participants.