The Securities and Exchange Commission (SEC) has issued a directive mandating all public companies and their registrars to stop 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 some registrars and companies continue to deny shareholders access to dividends on the grounds that they have exceeded the 12-year limit. This, according to the Commission, is contrary to the provisions of the Finance Act 2020.
“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 Commission reaffirmed that shareholders retain the right to claim dividends that had not become statute-barred as of December 31, 2020, the date the Finance Act 2020 came into effect.
Citing Section 60 of the Finance Act, the SEC explained that dividends unclaimed for six years or more are to be transferred to the Unclaimed Funds Trust Fund, where they will be held in trust until claimed by the rightful shareholders.
This move is part of efforts to improve investor confidence and uphold transparency in the capital market.
