The Securities and Exchange Commission (SEC) has cut down the time, processes and costs of the transmission of shares from a deceased investor to their beneficiaries.
The capital market regulator said in a statement on Thursday that the decision is to reduce the quantum of unclaimed dividends in the Nigerian capital market.
The decision will also encourage beneficiaries of deceased investors to step up efforts to claim such dividends.
A statement by the SEC spokesperson, Efe Ebelo, said the effort would ensure seamless transmission and claim of a deceased’s shares by heirs and administrators.
“In an amended draft on the operating framework for transmission of shares, SEC has reduced the timeline for the transmission of deceased’s shares from three weeks to one week,” Mrs Ebelo said.
Going by the new arrangement, she said registrars are expected to ensure shares of a deceased invested are transmitted within a week of receiving the request from the administrators or executors.
She said the registrar is also required to transmit the Letter of Administration to the Probate Registry within 24 hours of receipt of same for verification.
The administrators/executors, the SEC spokesperson said, are however required to provide a letter introducing them as the legal representatives of the estate.
“The letter should also indicate the names, addresses, signatures and BVNs of the individual Administrators/Executors,” she said.
Other requirements include the original Death Certificate from the National Population Commission (NPC) for sighting; original probate letter or Letter of Administration for sighting or the Certified True Copy (CTC) from a Notary Public.
Also, a copy of newspaper advert placed by the Court or Gazette, in addition to any evidence of ownership of the investment, like a Central Securities Clearing System (CSCS) statement(s) of the deceased, original share certificates, dividend stub or dividend warrants or bank statement(s), showing receipt of dividend(s) into the account(s) of the deceased.
“Where the Administrator/Executor cannot provide these requirements, the Registrar may require confirmation through insurance, indemnity or interview” the SEC said.
Fees and penalties
Besides, SEC said “the fees chargeable for transmission of shares by registrars is limited to one percent of the total value.
“Additional five percent Value Added Tax (VAT) for shares of N5 million and below and 0.5 per cent of the value and five per cent VAT on shares above N5 million with a maximum chargeable amount of N200,000, excluding VAT.
Also, fees chargeable for confirmation of probate or letter of administration shall not exceed N12,000.
Again, registrars are also disallowed from charging fee on dematerialisation of share certificate and mandating of accounts for electronic dividend.
However, SEC said change of address, name or mandate shall not attract more than N100 per request, while update of update of signature capture and scanning shall not be more than N200 per signature.
The SEC warned that any registrar found to have violated the provisions of the rules shall be liable to a penalty of not less than N1 million and an additional N20,000 for every day the violation persists.
The new rules also seek to standardise the turnaround time for processing all requests for replacement and update from the date of submission of all relevant documentations.