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The Securities and Exchange Commission (SEC) Nigeria has issued a directive mandating all public companies and their registrars to cease treating unclaimed dividends older than 12 years as statute-barred—particularly those declared before the enactment of the Finance Act 2020.
In a circular released on Tuesday, the SEC expressed concern that certain entities continue to deny shareholders access to unclaimed dividends by citing the 12-year limitation rule, in violation of updated legal provisions.
“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… as being ‘statute-barred’ without recourse to the provisions of the Finance Act 2020,” the Commission stated.
Under Section 60 of the Finance Act, dividends unclaimed for six years or more are required to be transferred to the Unclaimed Funds Trust Fund (UFTF), where they will be held in trust for eventual claims by rightful shareholders.
However, the SEC clarified that until the Federal Government fully operationalises the UFTF, registrars and public companies must continue to process shareholder claims for such dividends—especially those still legally valid as of December 31, 2020, the date the Finance Act came into effect.
“Pending the setting up and operationalisation of the UFTF… 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 circular read.
The directive also requires full compliance and submission of periodic reports from all relevant parties in line with SEC’s regulatory guidelines.
This move reinforces the Commission’s commitment to investor protection and market transparency, while ensuring that legitimate shareholders retain their access to unclaimed entitlements, in accordance with the law.
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