The Securities and Exchange Commission (SEC) and Nigerian Exchange Group (NGX Group) Plc, in their plan to fully digitise the capital market, is creating a platform that will be instrumental to raise funds by listed entities while also resolving the growing unclaimed dividend that had risen to N190 billion.
Particularly, the consistent increase in the amount of unclaimed dividend is a major concern for capital market stakeholders even as several efforts, in the past, to trace owners of these unclaimed dividends were futile.
Available statistics shows 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 the event, both entities outlined their joint initiatives to create a digital platform designed to revolutionise the process of raising equity capital in the primary market, with a particular emphasis on public offerings 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.
Speaking during a press conference and stakeholder engagement session at the Nigerian Exchange Group yesterday in Lagos, Group managing director/chief executive officer of NGX Group, Temi Popoola said, “E-Offering will assist a lot to resolve the issue of unclaimed dividend because the core matter of unclaimed dividend is identity but once this is dealt with, with information on the platform, this can be seriously addressed.
“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, also ensuring standard capital market intermediation is upheld without compromise.”
On his part, the director-general of SEC, Dr. Emomotimi Agama stated that, “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.”
He added that, “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 $1 trillion economy target of the current administration.”
The digital platform is designed to increase retail engagement in the capital market, enhance financial inclusion, and expand the available capital pool. As banks aim to fulfil their revised minimum capital requirements via primary markets, the SEC and NGX Group have committed to facilitating a seamless process to help banks and other issuers meet their business objectives.
This partnership between the SEC and NGX Group represents a major advancement in the modernization of Nigeria’s capital market infrastructure, aiming to improve efficiency, transparency, and accessibility for all participants in the market.