The Securities and Exchange Commission (SEC) has directed all public companies and Registrars to cease the practice of treating dividends unclaimed for over 12 years as “statute-barred,” especially those declared before the enactment of the Finance Act 2020.
In a circular posted on its website on Tuesday, the Commission stated that the directive aligns with Section 60 of the Finance Act 2020, which stipulates that any dividend unclaimed for six years or more must be transferred to the Unclaimed Funds Trust Fund (UFTF) a government-managed account where the funds remain available for shareholders to claim at any time.
“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.
The SEC clarified that shareholders are still entitled to claim dividends that were unclaimed for more than six but fewer than 12 years before December 31, 2020, the date the Finance Act came into effect. The directive is aimed at correcting widespread misinterpretation of the law by Registrars and public companies.
“Where dividends declared by a public company quoted on the Nigerian Exchange Limited remained unclaimed for a period of six years or more, such dividends are expected to be transferred to the UFTF to be held in trust and managed pending when the shareholder presents a claim,” the Commission explained.
The UFTF, a mechanism established under the Finance Act 2020, is yet to become fully operational. In the interim, the SEC has directed public companies and their Registrars to honour all legitimate shareholder requests for unclaimed dividend payments, regardless of how old the claims are, provided they fall within the scope defined by the Act.
“Pending the setting up and operationalisation of the UFTF by the Federal Government, pursuant to its powers under Sections 3(4)(e) and 93 of the Investments and Securities Act 2025, public companies and Registrars are to continue to honour all requests by shareholders for the payment of such dividends,” the circular added.
The SEC also instructed companies and Registrars to ensure immediate compliance with this directive and to submit regular reports in accordance with guidelines prescribed in the Commission’s Rules and Regulations.
This move is expected to restore shareholder confidence and reinforce the rights of investors, many of whom have long struggled to reclaim dividends classified as “expired” or “lost” by some Registrars.
