Nigeria: COVID-19 - SEC Bans Direct Payment of Investors' Dividend to Stockbrokers

11 May 2020

As part of measures to protect investors in the nation's capital market, post coranavirus, COVID-19 pandemic, the Securities and Exchange Commission, SEC has banned stockbrokers from collecting dividend payment due to investors in order to improve market confidence that has gradually been coming up five days after the easing of lockdown in the country.

"The Acting Director General, SEC, Mary Uduk who confirmed this stated that investor protection as one of the major mandates of the SEC which is viewed seriously knowing that investors will not come to the market in the absence of adequate protections for them.

"She said: "One of the ways we protect investors is the e-dividend system we have put in to ensure investors get their dividends directly. Dividends do not have to be routed through stockbrokers any longer. We also have the Direct Cash Settlement, Complaints Management Framework, Transmission of shares among others initiatives to protect investors."

"Continuing she said: " We also have continued to educate investors on how to approach the market, we have continued to ensure improvement of market conduct, and we are working to deepen the market to ensure there is improved confidence. We are optimistic that confidence in the market will continue to improve".

The SEC Boss added that another form of investor protection the Commission continues to offer is to ensure that market conduct is at its best, as the SEC ensures that registered capital market operators treat investors fairly and obey the rules of the market.

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