The plan for R4.5 billion in unclaimed dividends in South Africa

 ·1 Feb 2024

South Africa currently has around R4.5 billion in unclaimed assets, and the Johannesburg Stock Exchange (JSE) is seeking to launch a nationwide initiative to match claimants with their unclaimed monies.

Following the issuance of the Financial Sector Conduct Authority’s (FSCA) discussion paper in 2022, which highlighted the pressing issue of unclaimed financial assets in South Africa, including unclaimed dividends among South African investors, the Johannesburg Stock Exchange (JSE) is seeking to launch a nationwide initiative to match claimants with their unclaimed dividends.

According to FSCA’s discussion paper, there is an estimated R88.56 billion worth of unclaimed assets across the financial sector, with over R4.5 billion worth of unclaimed benefits in the form of unclaimed dividends.

The plan essentially is to reunite individuals with unclaimed or ‘lost’ entitlements stemming from limited or outdated information about the owners or holders of shares.

“As the JSE, we firmly believe that returning R4.5 billion worth of unclaimed dividends to South African owners of shares will make a profound economic impact on their lives.

“The JSE is supportive of the goal of ensuring that unclaimed dividends reach shareholders and that these shareholders continue to benefit from their ownership of their securities into the future,” said Vuyo Lee, the Director of Marketing and Corporate Affairs at the JSE.

The initiative will begin with a shareholder education drive that will inform the public on:

  • How dividends work,
  • The ways unclaimed dividends could arise,
  • How individuals can verify whether unclaimed shares and dividends are due to them from listed companies that are participating in the initiative and
  • How to update their shareholder information.

JSE Investor Services (JIS), a subsidiary of the JSE, will be the implementation agent for the processing and payment of dividends to legitimate claimants and updating the share registers of companies.

“Through its tracing services, JIS has over the last five years identified and paid R408 million due to thousands of investors, including a significant portion of Black Economic Empowerment (BEE) shareholders, with some claims dating back more than 15 years.

JIS possesses the expertise, resources and track record to execute the second phase of this JSE initiative effectively,” Lee said.

JIS will use its contact centre capabilities, data privacy protocols, digital shareholder verification, and online claims processing through ShareHub without the process.

“The rollout of the unclaimed dividends initiative also requires the involvement and support of the broader business community and financial markets to ensure its success.

The JSE has engaged with several larger issuers who have indicated their commitment to participate in the initiative and will contribute to its nationwide implementation.

They collectively recognise the importance of this initiative in growing shared prosperity for all.

Once the initiative commences, the JSE will communicate to the public, including what processes they can follow to verify whether any outstanding dividends are due to them.

Read: South Africa kisses over 9,000 millionaires goodbye

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