The Nation Newspaper

Tag: NSE

  • NSE prepares for e-IPO

    The Nigerian Stock Exchange (NSE) is set to launch the electronic initial public offering (e-IPO) in the capital market.

    As part of the arrangements for the automation of public offering, the NSE held training on modalities for e-IPO and the functionalities at the Exchange that will facilitate the automation.

    Stakeholders in the capital market are working towards the full automation of initial public offerings and other public primary offers in the Nigerian market. Many analysts believed that the much-awaited IPO of MTN Nigeria would  pioneer the new process. MTN Nigeria has reiterated its commitment to float its IPO in the second half of this year.

    The full automation of primary issuance will involve automation of the process, approval, documentation, subscription and allotment of all issues, especially IPOs and public offers. With this, investors will be able to subscribe and make payment for IPOs and public offers online with such orders being matched and allotted electronically and directly to the investment accounts of the investors at the Central Securities and Clearing System (CSCS).

    The full automation will enable the primary market to operate within a designated transaction cycle, possibly within the T+3 four-day trading cycle currently being operated at the secondary market.

    Investors will also be able to monitor and change their orders within a designated period while subscribers with personal access to the internet and online stockbroking trading portals can make direct subscriptions from anywhere.

    Not less than four companies have indicated plans to float IPOs. MTN Nigeria had in 2016 appointed the advisory team and set out a roadmap towards listing on the NSE in 2017.

    MTN Nigeria Board had announced the appointment of Stanbic IBTC Capital Limited and its affiliates, Standard Bank of South Africa Limited and Standard Advisory London Limited and Citigroup Global Markets Limited as joint transaction advisors and joint global coordinators for the proposed listing of MTN Nigeria on the NSE. The telco, however, missed the 2017 target.

    Med-View Airlines Plc, which listed its shares by way of introduction on the NSE in January, last year, also plans to launch its an IPO to raise new equity funds to expand its operations and allow more investors to participate in the ownership of the airlines.

    Crown Natures Nigeria Plc, an indigenous manufacturer of various kinds of branded and unbranded textile products that have 90 per cent local content ratio, plans to float an IPO to raise new equity funds to finance its business expansion programme.

     

  • NSE halts trading on Paints & Coatings Manufacturers

    The Nigerian Stock Exchange (NSE) has suspended trading on the shares of Paints and Coatings Manufacturers Nigeria (PCMN) Plc as the company moves to finalise its voluntary delisting from the Exchange.

    Authorities at the Exchange said they decided to suspend trading on the shares of the paints company with effect from Wednesday May 30, 2018 in line with the effective date for determining the shareholders, who will qualify to receive the scheme shares ahead of the implementation of the voluntary delisting of the company.

    PCMN shareholders had earlier this year approved sub-joined resolutions that will see the relapse of the company to a private limited liability company and the delisting of its shares from the NSE. A new company-Paintcom Investment Nigeria Limited is proposed to emerge after the delisting.

    The Asset Management Corporation of Nigeria (AMCON) had recently sold the fourth largest equity stake in PCMN to Bizfeat Ventures Limited, a relatively unknown firm. AMCON, the bad-debt resolution corporation, floated by the government, transferred its 7.4 per cent equity in PCMN to Bizfeat Ventures through a negotiated cross deal at the NSE.

     

  • NSE suspends trading on PCMN

    The Nigerian Stock Exchange (NSE) has suspended trading on the shares of Paints and Coatings Manufacturers Nigeria (PCMN) Plc as the company moves to finalise its voluntary delisting from the Exchange.

    Authorities at the Exchange said they decided to suspend trading on the shares of the paints company with effect from Wednesday May 30, 2018 in line with the effective date for determining the shareholders who will qualify to receive the scheme shares ahead of the implementation of the voluntary delisting of the company.

    Shareholders of PCMN had earlier this year approved sub-joined resolutions that will see the relapse of the company to a private limited liability company and the delisting of its shares from the NSE.

    A Federal High Court had directed the company to convene a court-ordered meeting on February 15, 2018 in Lagos during which shareholders deliberated and voted to approve a scheme of arrangement for the change in the status of the company and the delisting from the NSE. A new company-Paintcom Investment Nigeria Limited is proposed to emerge after the delisting.

    The Asset Management Corporation of Nigeria (AMCON) recently sold the fourth largest equity stake in PCMN to Bizfeat Ventures Limited, a relatively unknown firm. AMCON, the bad-debt resolution corporation floated by the government, transferred its 7.4 per cent equity stake in PCMN to Bizfeat Ventures through a negotiated cross deal at the NSE.

    The block divestment involved transfer of a total of 58.66 million ordinary shares of 50 kobo each held by AMCON to Bizfeat Ventures at a negotiated price of N1.05 per share.

     

  • NSE suspends trading on PCMN

    The Nigerian Stock Exchange (NSE) yesterday suspended trading on the shares of Paints and Coatings Manufacturers Nigeria (PCMN) Plc as the company moves to finalise its voluntary delisting from the Exchange.

    Authorities at the Exchange said they decided to suspend trading on the shares of the paints company in line with the effective date for determining the shareholders who will qualify to receive the scheme shares ahead of the implementation of the voluntary delisting of the company.

    Shareholders of PCMN had earlier this year approved sub-joined resolutions that will see the relapse of the company to a private limited liability company and the delisting of its shares from the NSE.

    A Federal High Court had directed the company to convene a court-ordered meeting on February 15, 2018 in Lagos during which shareholders deliberated and voted to approve a scheme of arrangement for the change in the status of the company and the delisting from the NSE. A new company-Paintcom Investment Nigeria Limited is proposed to emerge after the delisting.

    The Asset Management Corporation of Nigeria (AMCON) recently sold the fourth largest equity stake in PCMN to Bizfeat Ventures Limited, a relatively unknown firm. AMCON, the bad-debt resolution corporation floated by the government, transferred its 7.4 per cent equity stake in PCMN to Bizfeat Ventures through a negotiated cross deal at the NSE.

    The block divestment involved transfer of a total of 58.66 million ordinary shares of 50 kobo each held by AMCON to Bizfeat Ventures at a negotiated price of N1.05 per share.

    The NSE operates two delisting windows-voluntary and compulsory delisting. Under voluntary delisting, quoted companies can opt to delist their shares from the Exchange due to various reasons including mergers and acquisitions, restructuring and private interests subject to fulfilment of the delisting rules and requirements.

    Under the compulsory delisting window, the NSE may opt to delist companies that have failed repeatedly to meet extant rules and best practices in line with the Exchange’s commitment to protect investors and ensure that listed companies comply with global best practices.

  • NSE gives Union Bank, Transcorp, four others more time on shareholding restructuring

    Authorities at the Nigerian Stock Exchange (NSE) have granted six companies further extension of the deadline to restructure their share capital in a way to dilute the overconcentration of shares and free more shares for minority shareholders.

    This followed an exclusive report by The Nation a fortnight ago that 13 listed companies had failed NSE’s main listing requirement of free float and were trading below the minimum volume of shares required for retail shareholdings and general public trading on their shares.

    The Nation had reported that 13 companies had free float deficiencies, a major infraction that may adversely affect liquidity and efficient price discovery.

    A regulatory report obtained yesterday showed that six of the 13 companies have been granted extended deadlines to restructure their share capital while seven companies remain in default of the earlier deadlines granted to them.

    The six companies that have received waivers and extended deadlines include Union Bank of Nigeria (UBN) Plc, Transcorp Hotels Plc, Infinity Trust Mortgage Plc, Great Nigeria Insurance Plc, E-Tranzact International Plc and AG Leventis (Nigeria) Plc.

    The seven companies in default of the earlier deadline include Capital Hotel Plc, Chellarams Plc, The Tourist Company of Nigeria Plc, Interlinked Technology Plc, Caverton Offshore Support Group Plc, Ekocorp Plc and Champion Breweries.

    The trio of UBN, Transcorp Hotels and Great Nigeria Insurance were given extended deadline of May 18, 2020 while AG Leventis, E-Tranzact International and Infinity Trust Mortgage were given up till October 19, 2020, May 17, 2019 and May 17, 2021 respectively.

    A source in the know of the approval process said the extension of the deadline was sequel to applications by the directors of the affected companies, seeking waiver and further extension of the timeline for the dilution of the share structure.

    The source said the companies had cited prevailing market conditions and corporate procedures for their inabilities to meet the previous deadlines.

    Free float, otherwise known as public float, refers to the number of shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake, which is 5.0 per cent and above in Nigeria.

    Thus, free float’s shares do not include shares held directly or indirectly by any officer, director, controlling shareholder or other concentrated, affiliated or family holdings.

    Stock markets maintain minimum public float to prevent undue concentration of securities in the hands of the core investors and related interests, a situation that can make the stock to be susceptible to price manipulation. Besides, it provides the general investing public with opportunity to reasonably partake in the wealth creation by private enterprises.

    Companies listed on the Exchange are required to maintain a minimum free float for the set standards under which they are listed in order to ensure that there is an orderly and liquid market in their securities. The free float requirement for companies on the main board is 20 per cent of market capitalisation while companies on the premium board are required to have free float of 20 per cent or above N40 billion on the date the Exchange receives the company’s application to list. Companies on the third tier board, otherwise known as Alternative Securities Market (ASEM) are required to have 15 per cent free float.

    According to the report, Union Bank of Nigeria has a free float of 14.94 per cent; Capital Hotel, 2.62 per cent; Great Nigerian Insurance, 16.0 per cent; Chellarams, 15.0 per cent; AG Leventis, 11.64 per cent; Interlinked Technology, 14.50 per cent; Infinity Trust Mortgage, 3.50 per cent; Transcorp Hotels, 6.0 per cent; Ekocorp, 11.84 per cent; Champion Breweries, 17.30 per cent; Caverton Offshore Support Group, 17.40 per cent; The Tourist Company of Nigeria Plc, 3.58 per cent and E-Tranzact International Plc, which has a free float of 10.06 per cent.

    Failure by the companies to restructure their share capital at the expiration of the deadline or secure extension of the deadline may lead to delisting of their shares from the NSE. Free float deadline is usually in deference to application by the management of a company for some period to comply with the free float. However, the company is required to provide quarterly disclosure report to the NSE on the efforts being made to fully comply by the deadline.

    By the expiration of the deadline, a company is mandatorily required to have completed partial divestments or dilution of the ‘non-public’ shareholdings to free  the required percentage of equity stake for public holding, unless the management of the NSE grants fresh waivers and extensions for the companies. In the extreme instance, a company with deficient public float may opt to delist its shares.

  • NSE sanctions six more banks over financial reports

    The Nigerian Stock Exchange (NSE) has sanctioned  more companies for failing to meet the deadline for the submission of their audited report and accounts for last year.

    A report obtained by The Nation indicated that FBN Holdings Plc – the holding company for FirstBank of Nigeria and its former subsidiaries – will pay N2.1 million fine for the duration of its delay, Fidelity Bank Plc, which just released its results last week, N2.7million, Sovereign Trust Insurance Plc, N2.1 million, while Meyer Plc N2.1 million.

    The Exchange also imposed sanctions on Presco and Sterling Bank, which were earlier found liable for the same act. Presco will pay N1 million fine for failing to submit its audited report within the deadline and another N300,000 for failing to submit its first quarter results for 2018. Sterling will pay another N1.3 million fine for the delay of its 2017 audited financial statements.

    The Nation had earlier reported exclusively that the Exchange  sanctioned seven companies and reserved the penalty of  32 others, which sanctions were undergoing administrative review to determine what they will pay.

    The sanctioned companies included Vitafoam Nigeria, N800,000; Academy Press, N35 million; International Breweries, N100,000; First City Monument Bank (FCMB) Group, N100,000; Abbey Mortgage Bank, N700,000 and Wema Bank, N800,000.

    Post-listing rules at the NSE require quoted companies to submit their audited earnings reports, not later than three months or 90 calendar days after the expiration of the period. The deadline for submission of annual report for companies with Gregorian calendar business year ended December 31, 2017 was March 31.

    Under the rules at the Exchange, late submission under the first instance of 90 days could attract N9 million, the additional period of 90 days will attract N18 million while such delay beyond the first 180 days to the next 180 days could attract as much as N72 million, bringing fines payable by a defaulting company within a year to N99 million.

    A late submission attracts a fine of N100,000 per day for the first 90 calendar days of non-compliance, another N200,000 per day for the next 90 calendar days and a fine of N400,000 per day thereafter until the date of submission.

    For the 2016 business year, companies paid more than N400 million as fines for late submission of accounts. The Nation’s check indicated that fines for the default filings for the 2017 business year may exceed N500 million.

    Companies that had been marked  for sanctions include Nigerian German Chemical, Roads Nigeria, Afromedia, AG Leventis Nigeria, African Alliance Insurance, Cornerstone Insurance, Diamond Bank, Fortis Microfinance Bank, Great Nigeria Insurance and Linkage Assurance.

    Also on the list were Morison Industries, Multiverse Mining and Exploration, Mutual Benefits Assurance, Niger Insurance, Oando, Omoluabi Mortgage Bank, RT Briscoe, Royal Exchange, Skye Bank, Staco, Standard Alliance, Sunu Assurances Nigeria-formerly Equity Assurance, Union Bank of Nigeria, Unity Bank, VeritasKapital Assurance and Universal Insurance Company.

    The Exchange started implementation of the rules on submission of periodic reports and results and the enhanced sanction regime on January 1, last year. Under the rules, quoted companies are required to file their unaudited quarterly accounts with the NSE not later than 30 calendar days after the relevant quarter, and publish it within five business days after the date of filing, in at least two national daily newspapers, and post it on the company’s website, with the web address disclosed in the newspaper publication.

     

    Also, an electronic copy of the publication shall be filed with the Exchange on the same day as the newspaper publication.

    Where the company chooses to audit its quarterly accounts, it is required to file such accounts not later than 60 calendar days after the relevant quarter, and publish it within five business days after the date of filing, in at least two national daily newspapers and post it on the company’s website, with the web address disclosed in the newspaper publications. Such a company will also be required to file electronic copy of the publication with the Exchange on the same day as the newspaper publication.

    For annual audited accounts, companies are required to file their audited annual report and accounts with the Exchange not later than 90 calendar days after the relevant year end, and published in at least two national daily newspapers not later than 21 calendar days before the date of the annual general meeting, and posted same on the company’s website with the web address disclosed in the newspaper publications. Also, an electronic copy of the publication shall be filed with the Exchange on the same day as the publication.

    Besides, a defaulting company will be tagged with the “Below Listing Standard” (BLS) or any other sign or expression to indicate that the company has failed to submit its accounts within the stipulated period and this tag shall remain for as long as the company fails to file its accounts.

    Where a company fails to file its accounts after the expiration of the first 90 days, the NSE will send such a company a “second filing deficiency notification” within two business days after the end of the first 90 days. In addition, the Exchange will suspend trading in the company’s shares and notify the Securities and Exchange Commission (SEC) and the market within 24 hours of the suspension.

    In a more rigourous naming and shaming practice, such a company is expected to within three business days of receipt of the second filing deficiency notification and suspension of trading in its securities, to inform the Exchange in writing of the status of the accounts, and issue a press release, of not less than half a page, in at least two national daily newspapers, with the company’s web address indicated in the newspaper publication, and posted on the company’s website disclosing the status of the relevant accounts, reason for the delay in submission, and the anticipated filing date. An electronic copy of the publication shall be filed with the Exchange on the same day as the publication. The suspension of trading in the company’s shares shall only be lifted upon submission of the relevant accounts in line with the requirements of the NSE.

    Any company that fails to publish accounts in two national daily newspapers as required, or fails to provide proof of publication, and for each instance of non-compliance with any directives of the Exchange, shall also be required to pay a fine of 50 per cent of its annual listing fee and a fine of N25,000 for every day the company remains in default.

    Where a company fails to also file its accounts after the second additional period of 90 days, bringing the default days to 180, days, the Exchange may take further appropriate actions including cautioning shareholders that the company’s listing is under threat of delisting and eventual delisting.

    The rules also empower the Exchange to delist a company within the first 90 days where the NSE determines that granting extended period is not necessary, especially where there are proven issues of financial fraud, gross corporate governance abuses and other illegalities.

    Under the rules, all accounts, circulars, and press releases to be published pursuant to the rules shall require the Exchange’s prior approval, and shall cover a minimum space of half a page per newspaper publication.

    However, the new rules make provisions for companies that require extended period to complete, audit or get regulatory approval for their accounts. The new rules grant the Exchange the powers to grant waivers and extension to companies based on the peculiarities of each company upon request by such company. A company that requires regulatory approval of a primary regulatory agency, like the Central Bank of Nigeria (CBN) for banks, must however have filed its account with the primary regulator not later than 30 calendar days before the earnings submission deadline for audited annual accounts and 14 calendar days for quarterly accounts.

    A defaulting company shall be required to pay the fines notwithstanding remedial action taken after the earnings submission deadline. According to the rules, notwithstanding that a company takes the required steps during the cure periods or later complies with the provisions of the rules, any company that defaults in filing its accounts within the stipulated periods shall be liable to pay the applicable penalties stated above, except the affected company had received waiver or extension of time by the Exchange.

     

     

  • Support private sector with capital, LCCI urges NSE

    The Lagos Chamber of Commerce and Industry (LCCI) has advised the Nigerian Stock Exchange (NSE) to mobilise investment funds for the private sector.

    Its President, Babatunde Ruwase, who spoke during his visit to the NSE,  said the such support would facilitate the needed industrialisation. He said the two organisations have a lot to do together to promote private sector development and the advancement of the nation’s economy.

    He said: “We seek collaboration with the NSE in making this happen, especially in the mobilisation of capital for investors especially the indigenous ones. As you very well know, the cost of fund in the money market, as well as tenor of funds, are not in tune with the yearning of investors, especially those with a long term perspective. This has constrained the growth of key sectors, including agriculture, manufacturing, property, construction and infrastructure. All these sectors need affordable long term funds.”

    He said the capital market window naturally provides the good option for funding investments, adding that LCCI would like to see a better impact of the funding window.

    He said there is need to collectively strengthen advocacy to make pension funds available for the long term financing needs of the economy.

    “We should also work together to explore options of financing of small businesses. As in many other economies, SME’s are critical to economic development especially the creation of jobs and the promotion of inclusiveness in the Nigerian economy,” he said. Runwase said funding SMEs remains a major challenge in the country. “It has been difficult to unlock the potentials in the sector partly as result of this problem,” he stated.

     

    He said LCCI is concerned about the deterioration of values of trust and integrity in business practices.

     

    According to him,  monetary, fiscal and trade policies have significant impact on the performance of the stock market and private sector investments generally. He said it will be useful to collaborate to promote investment-friendly policies in the economy through regular engagements with the relevant authorities of government.

    “We need to attract more private capital [domestic and foreign] into this economy, especially now that it is obvious that the government does not have the financial resources to fix the economy,” he said.

  • NSE sanctions eight companies for late results

    • 31 others to be penalised

    The Nigerian Stock Exchange (NSE) has sanctioned eight companies for submitting their audited reports and accounts for the immediate past business year late.Thirty-one others have been marked for sanction.

    A report obtained at the weekend by The Nation indicated that 39 companies fell “short of the minimum listing standards in terms of timely disclosure of their audited annual financial performance and have missed regulatory filings or awaiting regulatory approval of their primary regulators”.

    Sources, who confirmed the report, said the companies had been adjudged liable for sanction.

    Under the rules, late submission under the first instance of 90 days could attract N9 million, additional period of 90 days will attract N18 million while such delay beyond the first 180 days to the next 180 days could attract as much as N72 million. This brings fines payable by a defaulting company within a year to N99 million.

    Late submission attracts a fine of N100,000 per day for the first 90 calendar days of non-compliance, another N200,000 per day for the next 90 calendar days and a fine of N400,000 per day thereafter until the date of submission.

    For the 2016 business year, companies paid more than N400 million as fines for late submission of accounts. Checks indicated that fines for the default filings for the period under review year may exceed N500 million.

    Already, the Exchange has imposed various fines on eight companies. They include Vitafoam Nigeria, N800,000; Academy Press, N35 million; International Breweries, N100,000; FCMB Group, N100,000; Abbey Mortgage Bank, N700,000 and Wema Bank, which has been issued a fine of N800,000. Two other companies-Presco Plc and Sterling Bank Plc, have been notified of their fines.

    Others marked for sanctions include Nigerian German Chemical, Roads Nigeria, Afromedia, AG Leventis Nigeria, African Alliance Insurance, Cornerstone Insurance, Diamond Bank, FBN Holdings, Fidelity Bank, Fortis Microfinance Bank, Great Nigeria Insurance and Linkage Assurance.

    Also on the list are Meyer, Morison Industries, Multiverse Mining and Exploration, Mutual Benefits Assurance, Niger Insurance, Oando, Omoluabi Mortgage Bank, RT Briscoe, Royal Exchange, Skye Bank, Sovereign Trust Insurance, Staco, Standard Alliance, Sunu Assurances Nigeria-formerly Equity Assurance, Union Bank of Nigeria, Unity Bank, VeritasKapital Assurance and Universal Insurance Company.

    Post-listing rules at the NSE require quoted companies to submit their audited earnings reports, not later than three months or 90 calendar days after the expiration of the period. The deadline for submission of annual report for companies with Gregorian calendar business year ended December 31, 2017 was March 31, 2018.

    The Exchange started implementing the rules on submission of periodic reports and results and the enhanced sanction regime on January 1, 2017. Under the rules, quoted companies are required to file their unaudited quarterly accounts with the NSE not later than 30 calendar days after the relevant quarter. They are also to publish it within five business days after the date of filing, in at least two national daily newspapers, and post it on the company’s website, with the web address disclosed in the newspaper publication. Also, an electronic copy of the publication shall be filed with the exchange on the same day as the newspaper publication.

    Where the company chooses to audit its quarterly accounts, it is required to file such accounts not later than 60 calendar days after the relevant quarter, and publish it within five business days after the date of filing, in at least two national daily newspapers and post it on the company’s website, with the web address disclosed in the newspaper publications. Such a company will also be required to file electronic copy of the publication with the Exchange on the same day as the newspaper publication.

    For annual audited accounts, companies are required to file their audited annual report and accounts with the Exchange not later than 90 calendar days after the relevant year end, and published in at least two national daily newspapers not later than 21 calendar days before the date of the annual general meeting. They are expected to have posted same on the company’s website with the web address disclosed in the newspaper publications. Also, an electronic copy of the publication shall be filed with the Exchange on the same day as the publication.

    Besides, a defaulting company will be tagged: “Below Listing Standard” (BLS) or any other sign or expression to indicate that the company has failed to submit its accounts within the stipulated period. This tag shall remain for as long as the company fails to file its accounts.

    Where a company fails to file its accounts after the expiration of the first 90 days, the NSE will send such a company a “second filing deficiency notification” within two business days after the end of the first 90 days.

    In addition, the exchange will suspend trading in the company’s shares and notify the Securities and Exchange Commission (SEC) and the market within 24 hours of the suspension.

     

    In a more rigourous naming and shaming practice, such a company is expected to within three business days of receipt of the second filing deficiency notification and suspension of trading in its securities, to inform the Exchange in writing of the status of the accounts, and issue a press release, of not less than half a page, in at least two national daily newspapers, with the company’s web address indicated in the newspaper publication, and posted on the company’s website disclosing the status of the relevant accounts, reason for the delay in submission, and the anticipated filing date. An electronic copy of the publication shall be filed with the Exchange on the same day as the publication. The suspension of trading in the company’s shares shall only be lifted upon submission of the relevant accounts in line with the requirements of the NSE.

    Any company that fails to publish accounts in two national daily newspapers as required, or fails to provide proof of publication, and for each instance of non-compliance with any directives of the Exchange, shall also be required to pay a fine of 50 per cent of its annual listing fee and a fine of N25,000 for every day the company remains in default.

    Where a company fails to also file its accounts after the second additional period of 90 days, bringing the default days to 180, days, the Exchange may take further appropriate actions including cautioning shareholders that the company’s listing is under threat of delisting and eventual delisting.

    The rules also empower the Exchange to delist a company within the first 90 days where the NSE determines that granting extended period is not necessary, especially where there are proven issues of financial fraud, gross corporate governance abuses and other illegalities.

    Under the rules, all accounts, circulars, and press releases to be published pursuant to the rules shall require the Exchange’s prior approval, and shall cover a minimum space of half a page per newspaper publication.

    However, the new rules make provisions for companies that require extended period to complete, audit or get regulatory approval for their accounts. The new rules grant the Exchange the powers to grant waivers and extension to companies based on the peculiarities of each company upon request by such company. A company that requires regulatory approval of a primary regulatory agency, like the Central Bank of Nigeria (CBN) for banks, must however have filed its account with the primary regulator not later than 30 calendar days before the earnings submission deadline for audited annual accounts and 14 calendar days for quarterly accounts.

    A defaulting company shall be required to pay the fines notwithstanding remedial action taken after the earnings submission deadline. According to the rules, notwithstanding that a company takes the required steps during the cure periods or later complies with the provisions of the rules, any company that defaults in filing its accounts within the stipulated periods shall be liable to pay the applicable penalties stated above, except the affected company had received waiver or extension of time by the Exchange.

     

  • NSE fines African Alliance N46.1m for late account submission

    •Firm records N21b negative reserve

    The Nigerian Stock Exchange (NSE) has imposed a fine of N46. 1 million on African Alliance Plc for breaking its rule on account submission.

    According to NSE X-Compliance Report, released on April 12, 2018, the  fine is for late submission of its 2015 and 2016 audited accounts.

    The fine and management expenses have, however, affected the reserves of the company as it recorded N1.49 billion management expenses and negative reserves amounting to -N21.05 billion during the period under review.

    With the negative reserves, the company may not be able to meet most of its responsibilities, especially prompt claims payment.

    According to the NSE, the company filed its audited and interim financial statements after the regulatory due date, stating that it applied sanctions in accordance with the rules for filing of accounts and treatment of default filing under the Rulebook of The Exchange.

    In addition, the NSE described the company as a delinquent filer of audited accounts as it fell short of the minimum listing standards in terms of timely disclosure of its audited annual financial performance and has Missed Regulatory Fillings (MRF) or Awaiting Regulatory Approval (AWR) of their primary regulators, which is the National Insurance Commission (NAICOM).

    The shareholders of the company have expressed their displeasure at the way the company is being run, stating that instead of rewarding the shareholders, who have stood by the company during trying times, the firm is busy paying millions in fines to regulatory bodies.

    Speaking on behalf of shareholders in the insurance industry, the President, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, said: “Some insurance companies have  corporate governance issues. We commend NAICOM because it will not approve any account unless it is thorough. We give kudos to the Commission for safeguarding the interest of the investors as well as customers.”

    Insurance stocks, he said, have been unprofitable for shareholders for some years now as managment has not been able to give good returns on investment. He noted that this was the reason why share prices have remained at par value.

    He said shareholders react to the results a company releases, its dividend payout, its future prospect, adding that insurance companies have failed in all these.

    “So, where do you expect the price to go? The price would remain as it is. It is the dividend payout that throws up the prices, and so long as you don’t pay a commensurate dividend to the shareholders, that is what you get,” he said.

    Meanwhile, NAICOM has frowned at the attitude of some insurance operators for failing to file annual reports.

    A top NAICOM official said some companies, especially those quoted on the floor of the NSE file their reports as late as March 29 when indeed, the deadline for submission is March 30.

    He stressed that this is despite the Commission’s decision to fast-track approval for all quoted companies.

    He noted that the financial year end for insurance companies, as it is for other financial sectors, is December.

    He said the Commission is saddened that some operators still struggle to meet up with the deadlines.

     

  • NSE mulls new regulatory framework for Special Purpose Vehicles

    Authorities at the Nigerian Stock Exchange (NSE) are considering a new extensive regulatory framework for Special Purpose Vehicles (SPVs) as part of efforts to protect investors and integrity of instruments listed on the stock market.

    An SPV is a subsidiary of a company formed with the purpose of acquiring and holding certain assets for the sole benefit of noteholders in the asset backed security, such that the noteholders have acquired nothing but undivided interests in the asset pool.

    Although, the two SPVs are currently listed on the Exchange, NSE presently has no specific rules for the listing of SPVs. The current practice is to modify and adopt as best as possible, the listing requirements of the asset class for which a listing is being sought, in order to evaluate the application filed by issuers.

    Executive Director, Regulation, Nigerian Stock Exchange (NSE), Tinuade Awe said the new regulatory framework for SPVs will provide issuers and their advisers with a practical guide to the listing of an SPV or securities issued by an SPV, on the Exchange.

    She noted that the new rules and regulations also contain important disclosures and requirements aimed at protecting investors, including that the SPV must be duly incorporated under applicable Nigerian law, or the law of its home country, and registered with the Securities and Exchange Commission (SEC), amongst other requirements.

    According to her, the rules also contain continuing obligations which the SPV is expected to comply with to maintain its listing on the Exchange; the role of the Servicer in the SPV transaction; the relationship between the Servicer and the SPV; exemptions which may be granted to the SPV; fees, termination of the transaction for which the SPV was set up; and sanctions to be applied for breach of the SPV Rules.

    A draft of the new rules and regulations obtained by The Nation indicated that directors of an SPV shall be fully accountable for the veracity of any information provided to the Exchange and the public, as well as the authenticity of any supporting documents.

    According to the draft, an SPV shall comply with all applicable rules and regulations of the SEC while the objects of the SPV as stated in its Memorandum and Articles of Association or Constitution shall be limited to matters relating to the transaction and shall only carry out activities related to or ancillary to the transaction regardless of its legal form.

    “Where the assets to be acquired by the SPV are owned by the Sponsor, the transferred assets shall be in the custody of the applicant SPV at the time of filing the listing application. The offer documents for the listing of the securities issued by the SPV shall in addition to complying with the requirements of these rules contain the information required in the SEC Securitization Rules,” the draft stated.

    Also, the SPV is expected to comply with all applicable laws, rules and regulations in Nigeria as well as relevant laws of its place of incorporation while it must also comply with the Exchange’s continuing listing obligations as specified under the class of assets for which its securities are listed.

    “No changes to the Memorandum and Articles of Association of the SPV, its shareholding structure, place of business, or change of name shall be effected without prior notification of the Exchange. Such notification shall be delivered to the Exchange not later than 14 calendar days prior to the proposed change,” the draft stated.

    The SPV is also required to immediately notify the Exchange of its intention to issue any new securitized debt instruments and it must also remain listed till the maturity or repayment of the securitized debt instruments or till the same is delisted pursuant to the delisting procedures laid down by the Exchange.

    The Servicer to the SPV shall be an entity registered with the SEC, with the requisite skill and knowledge to carry out the services required by the SPV. The Servicer shall collect and keep records of payments received on the asset, remit such collections to the SPV, and perform such other duties pursuant to the terms and conditions of the Servicing Agreement entered into with the SPV. The Servicer shall exist and operate independently of the SPV, and shall not share any common ownership, officers, or directors with the SPV.

    The transaction for which the SPV shall only be terminated if the SPV has not received the transfer of assets nor issued asset-backed securities for sale to investors under the transaction within six months from the date on which the scheme was approved unless extended by the SEC or where it has paid in full the debts owed to investors who have invested in the asset backed securities issued by it.

    The SPV may also be terminated if conditions for its dissolution as specified in the transaction occur or where SEC finds that the SPV is unable to continue to undertake its business, and the SEC liquidates the SPV in accordance with applicable laws.

    Also, the SPV may be terminated where the holders of at least two-thirds of the total amount of the SPV’s asset-backed securities still outstanding have resolved to dissolve the it and the requisite notice has been received by the SEC and NSE.

    “Any SPV that breaches any of the post listing rules shall be subject to sanctions, including but not limited to fines, suspension from trading and delisting of its listed securities as prescribed in the issuers’ rules of the Exchange,” the draft stipulated.