The Securities and Exchange Commission has directed all public companies and their registrars to stop treating unclaimed dividends older than 12 years as statute-barred, especially those declared before the enactment of the Finance Act 2020.
The directive follows concerns that some companies and registrars continue to deny shareholders access to unclaimed dividends on the basis that they are over 12 years old, contrary to provisions of the Finance Act 2020.
In a circular published by the Commission on Tuesday, the SEC reaffirmed that shareholders remain entitled to claim dividends that have not become statute-barred as of December 31, 2020, the date the Finance Act 2020 came into effect.
“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 read.
Citing Section 60 of the Finance Act, the Commission noted that dividends unclaimed for six years or more are to be transferred to the Unclaimed Funds Trust Fund, where they are to be held in trust pending claims by rightful shareholders.
The SEC added that until the Federal Government fully operationalises the UFTF, companies and registrars are expected to continue to honour shareholder requests for payment of such unclaimed dividends.
“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, the Commission hereby directs public companies and their registrars to continue to honour all requests by shareholders for the payment of unclaimed dividends as described above, with effect from December 31, 2020,” the Commission said.
It further directed all affected parties to ensure immediate compliance and to submit periodic reports in accordance with the Commission’s Rules and Regulations.