Market Trends
SEC Orders Firms to Pay Out Long-Unclaimed Dividends
The Securities and Exchange Commission (SEC) has mandated public companies and their registrars to resume payments of dividends that have remained unclaimed for over 12 years, especially those declared before the Finance Act 2020 took effect.
This directive comes amid complaints that some firms and registrars are still refusing to process requests for such dividends, citing a 12-year statute of limitation—despite clear provisions under the Finance Act that entitle shareholders to claim those funds.
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In a circular issued on Tuesday, the SEC clarified that any dividends not classified as statute-barred by December 31, 2020—the date the Finance Act came into force—must be paid to shareholders upon request.
“The Commission has noted that some paying companies and registrars continue to classify dividends older than 12 years as ‘statute-barred,’ contrary to the provisions of the Finance Act 2020,” the notice stated.
Citing Section 60 of the Act, the SEC explained that dividends unclaimed for six years or more should be moved into the Unclaimed Funds Trust Fund (UFTF), where they will be kept in trust until claimed by rightful owners.
However, the Commission emphasized that until the UFTF is formally set up and functional, companies and their registrars must continue to process and honour claims for all outstanding dividends dating back prior to the cutoff date.
“Until the Federal Government fully activates the UFTF in accordance with Sections 3(4)(e) and 93 of the Investments and Securities Act 2025, public companies and registrars are directed to continue honouring shareholder claims for eligible dividends from December 31, 2020 onward,” the Commission said.
The SEC concluded by instructing all involved parties to comply immediately and to submit routine reports in line with regulatory requirements.
