Discover how the JSE's nationwide campaign aims to recover R1 billion in unclaimed dividends for South Africans, empowering individuals to unlock their financial potential. File photo.
In a groundbreaking move aimed at empowering South Africans financially, the Johannesburg Stock Exchange (JSE) has announced a nationwide initiative to help individuals claim unclaimed dividends.
This campaign, spearheaded by the JSE, will address a significant issue in the country's financial sector, where billions of rands remains unclaimed due to people losing track of their assets or simply not knowing they are owed money.
In 2022, the Financial Sector Conduct Authority (FSCA) released research revealing that South Africa has approximately R88.56 billion in unclaimed assets. A large portion of this amount is linked to unclaimed retirement benefits, but a significant share is tied up in unclaimed dividends on the JSE.
According to Ursula Du Plooy, head of issuer services at the JSE, this situation stems from a range of factors. "People move homes, change jobs, retire, or frequently switch bank accounts. Many lose track of the dividends and benefits owed to them. Some even remain unaware of the dividends they’re entitled to. In fact, the JSE alone is sitting on R1 billion in unclaimed dividends," Du Plooy says.
The JSE’s efforts to locate these shareholders intensified after the acquisition of Link Market Services four years ago. The company now manages the registers of some listed companies, overseeing billions in unclaimed dividends.
Du Plooy says, there is a challenge to locating shareholders. She says the challenge lies in the difficulty of tracking down the rightful owners of these funds. "In the transfer secretary business, we maintain the shareholder registers for listed companies. However, it’s incredibly difficult to find these people because we don’t have their up-to-date details, such as ID numbers and addresses. It’s a persistent problem in South Africa."
To tackle this issue, the JSE decided to take proactive steps to locate unclaimed shareholders and return their funds. The initiative began when issuers—companies whose dividends are owed—approached the JSE, asking for a solution to the growing problem of unclaimed dividends.
Du Plooy says the JSE’s reputation as a trusted financial institution positioned it well to lead this initiative. She says many South Africans are suspicious of unsolicited calls from unknown entities, fearing scams. "If you get a call from someone asking for your personal details, you’re understandably cautious. But when the JSE, a trusted institution, drives the campaign, people are more likely to trust that it’s legitimate".
The JSE has partnered with JSE Investor Services, a subsidiary of the JSE that handles shareholder services, to manage the administrative part of the campaign. Du Plooy says the campaign’s aim is not just to pay out dividends, but to update shareholder registers and ensure issuers can more easily communicate with their investors going forward.
According to Du Plooy, to ensure maximum outreach, the JSE is launching a comprehensive, national educational campaign. The initiative will leverage various media channels, including radio programs, social media, and even TikTok, to spread awareness about unclaimed dividends and encourage shareholders to come forward.
From February 1, 2024, individuals who believe they may be entitled to unclaimed dividends can call a dedicated call center, where they will be asked to provide their full name, ID number, and address. This information will be entered into a centralised system called ShareHub, which will cross-reference the details with JIS’s extensive database to identify potential matches.
Du Plooy says the JSE is also working with Baker Street, a company with specialised databases, to ensure the accuracy of the information. Shareholders will then be placed into different queues based on the likelihood of a match, and if the shareholder has been FICA’d and verified with Home Affairs, the dividends will be paid out.
The verification process is vital to ensure that dividends are paid to the correct individuals. Du Plooy says, "If we find a match, we still need to verify the information. For example, if it's a deceased estate, we need to ensure that the person claiming is the rightful executor of the estate, and we may require legal documentation."
She says this thorough process is essential for maintaining the integrity of the campaign and ensuring that funds go to the rightful beneficiaries.
According to Du Plooy, the campaign already has support from several major companies listed on the JSE, including Sasol, Old Mutual, Supergroup, Growthpoint, Naspers, Northam Platinum. She says these companies have thousands of shareholders, many of whom may have unclaimed dividends, some of whom may not even know they are owed money.
According to Vuyo Lee, director of marketing and corporate affairs at the JSE, the campaign’s potential economic impact cannot be overstated. "Claiming dividends owed to you is more than just accessing funds; it’s about unlocking your financial potential," Lee says. "Returning R4.5 billion worth of unclaimed dividends back to South African investors can make a profound economic impact on the everyday lives of people."
Du Plooy says this initiative is not expected to be a quick fix. It may take several years to locate and verify all the rightful shareholders. "We anticipate that this campaign could run for at least three years, if not longer.
"We need to educate people what shares are, why they matter, and how they can claim their rightful dividends," Du Plooy adds. "Our marketing efforts will be proactive, and we’ll provide a wealth of educational materials to guide people through the process."
According to Du Plooy, for now, the JSE’s focus remains on the dividends. However, the success of this initiative could pave the way for tackling larger unclaimed asset issues across the country, including pension funds, with the same level of dedication and thoroughness.
PERSONAL FINANCE