In a major move to protect investors and enforce transparency in Nigeria’s capital market, the Securities and Exchange Commission (SEC) has issued a decisive directive mandating public companies and their registrars to honour all shareholder claims on unclaimed dividends—even those exceeding 12 years in age—provided they were still valid as of December 31, 2020.
This directive, issued via a circular on Tuesday, directly addresses ongoing concerns from shareholders who have reportedly been denied access to long-outstanding dividend payouts. Many firms have continued to declare such dividends as “statute-barred,” citing the 12-year limitation period, even though the Finance Act 2020 changed that framework.
According to the SEC, its attention was drawn to the ongoing non-compliance by paying companies and registrars who, contrary to the provisions of the Finance Act 2020, have refused to pay dividends unclaimed for more than 12 years.
“The attention of the Securities and Exchange Commission has been drawn to the fact that paying companies and their registrars have continued to treat unclaimed dividends of public companies that are older than 12 years as being ‘statute-barred’ without recourse to the provisions of the Finance Act 2020,” the circular stated.
Citing Section 60 of the Finance Act, the SEC reaffirmed that all dividends unclaimed for six years or more are to be transferred into the Unclaimed Funds Trust Fund (UFTF), to be held in trust for legitimate shareholders. However, this fund is yet to be fully operational.
In light of this, the SEC has directed that until the UFTF is fully operationalised by the Federal Government—under the powers vested by Sections 3(4)(e) and 93 of the Investments and Securities Act 2025—all public companies must continue to process and honour valid claims.
“Pending the setting up and operationalisation of the UFTF by the Federal Government, the Commission hereby directs public companies and their registrars to continue to honour all requests by shareholders for the payment of unclaimed dividends, with effect from December 31, 2020,” the directive noted.
The SEC further mandated that all affected entities must immediately comply with the directive and submit periodic compliance reports as stipulated in its Rules and Regulations. This initiative is part of broader reforms aimed at restoring investor confidence and improving corporate governance practices within Nigeria’s capital markets.
According to financial analysts, the directive is timely and necessary, particularly as many Nigerians have grown frustrated by their inability to claim rightful dividends, some dating back over a decade. The ambiguity surrounding the statute of limitation has also led to legal tussles between shareholders and registrars.
“This move signals a renewed commitment by the SEC to protect retail investors, many of whom rely on dividend income for their livelihoods,” said Adetunji Lawal, a Lagos-based investment analyst. “It also compels registrars to upgrade their systems and ensure long-term record keeping is robust.”
With over N200 billion in unclaimed dividends sitting in the coffers of various firms and registrars as of 2024, the latest SEC directive could result in a wave of payout requests from long-waiting shareholders. It also signals the Commission’s intent to strengthen enforcement around corporate compliance and investor protection.
The SEC’s move is part of a larger regulatory shift in Nigeria’s financial system, particularly in dealing with dormant assets and improving capital market participation. In recent months, the Commission has also cracked down on illegal investment schemes and pyramid operations, stepping up its oversight on investor risk exposure.
SEC Orders Compliance on Unclaimed Dividends – The Securities and Exchange Commission has directed Nigerian public companies to pay out all valid unclaimed dividends, including those older than 12 years, in line with the Finance Act 2020. Until the Unclaimed Funds Trust Fund becomes operational, firms must honour shareholder claims and file compliance reports, ensuring greater investor protection and transparency in Nigeria’s capital market.
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For shareholders seeking clarity or to initiate claims on their unclaimed dividends, the SEC encourages them to approach their registrars directly and request updated procedures in line with the latest directive.
Contact SEC:
Visit www.sec.gov.ng or reach out via their investor complaint portal.