Securities and Exchange Commission ,SEC, has ordered all public companies and registrars to stop treating dividends older than 12 years as statute-barred.
The agency issued this directive in a statement on Tuesday, particularly referring to dividends declared before the enactment of the Finance Act 2020.
This move reaffirms the provisions outlined in Section 60 of the Finance Act, which governs unclaimed dividends and their proper treatment.
According to the Act, dividends unclaimed for over six years must be transferred to the Unclaimed Funds Trust Fund ,UFTF, pending shareholder claims.
According to the Director-General of the capital market regulator, Mr Emomotimi Agama, shareholders may still claim dividends not older than 12 years as of 31 December 2020.
Mr Agama noted some companies and registrars wrongly treat such dividends as “statute-barred”, ignoring the Finance Act 2020’s provisions.
“In response to ongoing inquiries, the commission wishes to clarify the proper interpretation and handling of such unclaimed dividends”, he said, explaining that under Section 60 of the Finance Act 2020, dividends unclaimed for six years must be moved to the UFTF.
These funds are to be held in trust, awaiting legitimate claims by shareholders at any point in the future.
Until the UFTF is fully operational, the SEC DG ordered companies and registrars to honour all valid dividend claims from December 31, 2020, onwards, adding that this must be complied with immediately, with regular reports to be submitted as required under the commission’s rules and regulations.
