SEC Warns Companies, Registrars on Selective Dividend Payout
The Securities and Exchange Commission (SEC) has warned quoted companies and capital market registrars to desist from selective payments and distribution of dividends to shareholders.
The Director-General of the SEC, Mr Lamido Yuguda, stated this at the 10th annual conference of the Institute of Capital Market Registrar’s (ICMR) with the theme, ‘Reinventing the Nigerian Capital Market for Growth: The Digital Technology Approach,’ held in Lagos during the weekend.
Yuguda who said that some registrars are unwilling to release the unclaimed dividends in their custody and have employed several antics to frustrate shareholders from enjoying the benefits of the E-DMMS platform, urged the ICMR to encourage its’ members to uphold the Code of Ethics of the profession and as contained in the Rules and regulations of the Commission.
He said “Capital market operators, have a duty to uphold the integrity of the capital market to foster investor confidence as Investors are the greatest assets any capital market has. The Commission would therefore not hesitate to sanction any erring operator in relation to unclaimed dividend or any other issue.”
The SEC DG also stressed the need for an optimal regulations of digital technology in the capital market to forestall likely disruptions that could threaten investors’ confidence.
According to him, as much as digital technology is expedient for the growth of the capital market, disruptions could threaten investors’ confidence in the market if digital technology is left unregulated.
Yuguda said the Commission had recognised that if the application of digital technology to financial market practices are not properly regulated, it could lead to outcomes that would threaten investor confidence in our market.
Yuguda noted that in consistence with the position of IOSCO, the commission has been sensitive to the regulatory challenges of a changing technological environment and has sought to balance the benefits of encouraging innovation and the use of new technologies against the need to protect investors and maintain orderly markets.
Yuguda, while noting that the Commission’s priorities are to ensure investor trust and confidence as well as fair, orderly, transparent, and efficient markets, said the Commission had issued rules to regulate several technology driven activities in the capital market such as crowdfunding, robo-advisory and digital sub-broking.
Despite declining on 3 trading sessions, the local bourse gained last week as the benchmark index rose 0.3% w/w to 43,308.29 points. Accordingly, YTD return improved to 7.5% (previously: 7.3%) while market capitalisaƟon grew േ54.0bn w/w to േ22.6tn. AcƟvity level was mixed as average volume rose 5.4% to 293.2m units while value fell 31.5% to േ3.8bn. The top traded stocks by volume were D E &/d (140.5m units), & E, (138.9m units), and 'd K (115.9m units) while E/d, (േ2.1bn), E ^d> (േ2.8bn), and & E, (േ1.7bn) led trades by value.
Performance of sectors within our coverage was mixed as 3 indices lost, 2 indices gained while the /ŶĚƵƐƚƌŝĂů 'ŽŽĚƐ index closed Ňat. >eading laggards, the ŽŶƐƵŵĞƌ 'ŽŽĚƐ index fell 2.0% w/w due to selloī in E/' Z/AE Z t Z/ ^ (-8.8%) and DAE'^h'AZ (-2.1%). ^imilarly, the Kŝů Θ 'ĂƐ and ĂŶŬŝŶŐ indices shed 0.9% and 0.3% w/w respecƟvely following sellpressure on DZ^ (-9.9%), ^ P>AT (-3.6%), 'T K (1.6%), and T/ (-7.0%). onversely, buying interest in A// K (н29.6%), Z 'A>/E^ (н7.7%), A/ZT >A& (н3.8%), and t' (2.9%) pushed the /ŶƐƵƌĂŶĐĞ and
&ZͲ/ d indices higher by 3.6% and 1.8% w/w respecƟvely.
/nvestor senƟment as measured by market breadth (advance/decline raƟo) strengthened to 0.8x from 0.3x recorded in the previous week as 27 stocks gained while 32 stocks lost. The top outperformers for the week were // K (н29.6%), hW> (н27.8%), and /< : ,Kd (н17.4%) while hd/y (-14.0%), DZ^ (9.9%), and hW (-9.8%) led the laggards. This week, we expect the market to extend it͛s posiƟve performance on the back of improved senƟment, barring any negaƟve shock.