Issuance of dividend warrants will stop by December- SEC

The Securities and Exchange Commission (SEC) has said the issuance of dividend warrants will be extended to 31st December 2019.

According to the SEC, this will allow relevant stakeholders deliberate on and address all outstanding issues.

The dividend warrant is a document that shows a shareholder of a company is entitled to a dividend from that company.

The warrants are usually sent to home, office or post office addresses of shareholders, a practice which the commission sought to ease and make more efficient with the introduction of the electronic dividend (E-Dividend).

The e-dividend facilitates immediate payment of dividends to shareholders and eliminates costs being carried by shareholders to ratify the warrants or registrars to send these warrants.

A circular on the Commission’s website, noted that the decision of the Commission is in furtherance of its overriding mandate to ensure that all categories of shareholders and investors are adequately protected.

However the SEC stated that the e-dividend initiative remains critical to the complete elimination of the phenomenon of unclaimed dividend,

Management of the Commission thus encouraged all shareholders who are yet to do so, to get mandated on the e-DMMS platform before 31st December 2019.

The Commission said that the SEC recently conducted a strategic assessment of the implementation of the e-dividend initiative across the country and reviewed feedback/observations received from stakeholders and the general public.

“The assessment revealed that while remarkable progress has been recorded in concerted efforts through robust enlightenment campaigns to mobilize more shareholders to get mandated on the e-DMMS platform, there remain a few pertinent issue that need to be resolved as a precursor to the total discontinuance of the issuance of dividend warrants by Registrars” the circular added