Thursday, 28 January, 2021

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Unclaimed dividends


Editorial

We must say that these problems are neither new nor entirely unexpected. Worthy of note is that SEC had in the past afforded the different categories of investors a window of forbearance to enable them correct the anomalies, and by so doing, put the matter to rest. Unfortunately, if the results are anything to go by, the measures would appear not to have gone far enough, let alone address the problems to any appreciable extent. Yet, it goes without saying that the matter of the unclaimed dividends needs to be put to rest one way or the other, for which the burden lies squarely with SEC to discharge.

One consideration in the search for a way out is not to make the hurdles so impregnable as to make the investor to prefer a walk. As far as possible, the process of validating the dividends should be made simple, shorn of the usual frustrations that such exercises have come to be associated with. Indeed, what the current situation suggests is a broader approach that takes the peculiarities of our environment into consideration, to ensure that the investor is not unduly punished for factors that are not necessarily of their own making.

Put in another way, there should be room for greater flexibility by SEC in the verification process, particularly by those in the category of so-called multiple identities. In the same way that owners of dormant bank accounts are not made to forfeit their savings for inactivity, we do not accept the so-called verification window after which the investor could be made to forfeit the shares. In short, the exercise should not be time barred. Being able to discharge the burden of proof of ownership at any point should suffice for the registrars to verify and bring their records up to date. That way, trust is further boosted and market deepened, for the good of all.

A sure way to ease the process is for SEC to consider publishing a directory of unclaimed shares. With some luck, majority of those on the list would step forward to do the needful.

Credit: The Nation

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