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Tag: SEC

  • Investors get relief as SEC launches protection fund

    Investors get relief as SEC launches protection fund

    -SEC steps up master plan implementation

    Securities and Exchange Commission (SEC), Nigeria’s apex capital market regulator, will inaugurate its National Investor Protection Fund (NIPF) tomorrow, providing a window of relief for investors that suffer losses due to defalcations by insolvent or bankrupt capital market operators, which are not dealing members of Securities Exchange or Capital Trade Points.

    The inauguration of the board of the NIPF tomorrow will complete a cycle of protection for investors that suffered losses due to inactions of capital market operators. The Nigerian Stock Exchange (NSE) had earlier launched an Investor Protection Fund (IPF) that covers losses due to inactions or bankruptcy of its dealing members-stockbrokers and dealers.

    Sources in the know confirmed that arrangements have been concluded for the inauguration of the board of the NIPF alongside other key initiatives as the apex capital market regulator steps up the implementation of the 10-year capital market master plan.

    The apex capital market regulator is also expected to inaugurate the Capital Market Master Plan Implementation Council (CAMMIC) and the Corporate Governance Score Card tomorrow.

    Under the rules of the NIPF, beneficiaries would include investors who suffer pecuniary loss due to the insolvency, bankruptcy or negligence of a capital market operator and defalcation committed by a capital market operator or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received or deemed received by the capital market operator in the course of its business as a capital market.

    The NIPF will cover the entire capital market activities under the regulation of SEC, a broader scope than the earlier IPF of the NSE, which covers only the operations of members of the NSE. The NIPF will apply only to defalcations by insolvent or bankrupt capital market operators not dealing members of Securities Exchange or Capital Trade Points. In other words, the NIPF will be for the purpose of compensating investors whose losses are not covered under the IPFs administered by Securities Exchanges and Capital Trade Points.

    The board of SEC, which had approved the NIPF, has earmarked initial take-off grant for the NIPF. The NIPF will subsequently generate funds through grants, subventions, donations and annual contributions to be made by all capital market operators not subject to contribute to the IPF of Securities Exchanges and Capital Trade Points. The board of the NIPF is also empowered to obtain loans, subject to approval of SEC. Also, the NIPF can generate funding through assets, properties or cash that shall be realized from liquidated operators after compensation to investors and proceeds from investment of its resources.

    The inauguration of the NIPF will be another milestone in the quest to boost investor confidence and attract them back to the market, coming on the heels of very robust public enlightenment campaign embarked upon by the SEC across the country. The board of SEC had in 2011 approved the establishment of the NIPF and it was subsequently incorporated on March 9, 2012 as a company limited by guarantee.

    With the launch of NIPF, Nigeria joins a handful of countries in the world with a dedicated national investor protection fund. While dozens of jurisdictions have functional investor protection funds run mainly by exchanges and their dealing members, Nigeria is now among only a few countries with a national investor protection fund to compensate investors for pecuniary losses arising from bankruptcy, negligence or malfeasance by a non-broker/dealer capital market operator.

    Also, the Commission will inaugurate the Capital Market Master Plan Implementation Council (CAMMIC) on Thursday, a day after the all-inclusive Capital Market Committee (CMC) meeting.

    Members of the highly influential council included 12 respected, highly-placed and experienced Nigerians capable of leading the emergence of the capital market Nigeria needs to develop.

    The council, according to sources, will be chaired by Mr. Olutola Mobolurin, a leading capital market operator who chairs the NASD Plc, Capital Bancorp and Custodian and Allied Plc. Mr Ariyo Olusekun, former president of the Chartered Institute of Stockbrokers (CIS) and executive chairman of Capital Assets Limited is also a member. Also included are key government officials including Dr. Joseph Nnanna, Deputy Governor in charge of Financial System Stability at the Central Bank of Nigeria; Mrs. Chinelo Anohu-Amazu, the Director General of PenCom; and Mr. Mounir Gwarzo, Director General of SEC.

    Other members include chairmen of the Capital Market Committees of both chambers of the Federal Legislature; Sen. Isiaka Adeleke and Hon. Tajudeen Yusuf, chief executive of Nigerian Stock Exchange (NSE), Mr. Oscar Onyema and other outstanding members from the private sector and capital market community such as Mrs. Hajara Adeola, Prof. Koyinsola Ajayi, Mr. Dotun Sulaiman and Mr. Ayoleke Adu.

    SEC is also expected to launch its Corporate Governance Scorecard for public companies. Developed with support from the International Finance Corporation (IFC), the Scorecard is based on the SEC 2011 code of corporate governance. The Scorecard is a tool for the assessment of corporate governance practices.  It is aimed at measuring adherence to the code of corporate governance. The Scorecard would also be used to assess the progress of companies’ governance practices overtime while enabling comparison among companies within or across sectors, with a view to fostering best practices.

    The corporate governance landscape in Nigeria has witnessed modest advances over the last decade. Five regulatory institutions have developed and released codes of corporate governance for participants in their respective industries. These include the Central Bank of Nigeria (CBN), the National Pensions Commission (PenCom), the National Insurance Commission (NAICOM) and the Nigeria Communications Commission (NCC). The fifth regulator is the SEC, whose 2011 Code of corporate governance covers all public companies regardless of their industry of operation in the country.

    Analysts have however noted that corporate governance is about disclosure and compliance not merely the release of codes. A key ingredient that had been missing all along in the Nigerian corporate governance environment has been the right instrument to incentivize compliance and encourage disclosure. That is the essential value that the SEC Scorecard is expected to add to the system.

    Gwarzo, who assumed office as the Director General of SEC in January, had said his priority and main agenda would be the implementation of the 10-year capital market master plan. The master plan is a product of key committees inaugurated by SEC in 2013 to work on long-term blueprints for the capital market, for non-interest capital market and for capital market literacy. The reports from the three committees were consolidated to form the 10-year capital market master plan (2015 – 2025), which was launched in November 2014.

    Gwarzo had taken immediate steps to actualize this agenda by identifying low-hanging fruits within the master plan that could be implemented before the end of 2015. Those initiatives, which the SEC has been implementing since the beginning of this year included e-dividends, dematerialisation, direct cash settlement, unclaimed dividends, non-interest products, robust public enlightenment, stronger enforcement and responsive rulemaking.

  • SEC to punish 94 firms

    SEC to punish 94 firms

    NINETY-FOUR inactive companies which could not comply with the new minimum capital base for capital market functions are to lose their licences.

    In a circular issued at the weekend, the Securities and Exchange Commission (SEC) directed the 94 firms to state on or before December 4 why “their registration as capital market operators should not be cancelled”.

    Extant capital market rules require the regulators to give quoted companies and operators notices before delisting them. The circular at the weekend served as both a pre-notice on the cancellation of the certificates of registration of the 94 firms as well as a notice to the investing public on the status of the firms.

    The Commission stated that the capital market firms “have consistently failed to render their statutory returns to the Commission and may have been unable to comply with the new minimum capital requirements before the deadline stipulated by the Commission which expired on 30th September, 2015”.

    SEC had started post-recapitalisation audit of capital market operators with a view to providing a final list of active and well-capitalised bona fide capital market operators by the end of this year. It had earlier released the preliminary list of firms that had met the September 30, 2015 deadline for recapitalisation.

    Both the SEC and the Nigerian Stock Exchange (NSE) are engaged in coordinated concerted efforts to weed out poorly capitalised capital market firms, which they had fingered as sources of several infractions. The regulators had argued that well-capitalised firms would be able to retain competitive technology, human resources and capital to operate effectively without recourse to infractions and pilferage of investors’ funds. But, some operators said infractions were not limited to small firms, noting that stockbroking service, as an agency service, requires no such huge capital but rather the integrity capital of the professionals. They warned that muscling out small firms might inadvertently hinder the spread and depth of the market since they are easily approachable by small-scale retail investors.

    The Nation noted that revocation of licences of the inactive firms as well as small-size firms may not have any significant impact on the operations at the stock market. There are 220 active broker-dealers on the NSE, but less than 15 per cent of the operators account for more than three-quarters of trading turnover at the market.

    The SEC circular confirmed several reports by The Nation that the NSE and SEC planned to delist poorly capitalised and inactive firms. The NSE is verifying compliance with its Minimum Operating Standards (MOS), which became effective on January 1, 2015.

    The MOS requirements were introduced last year by the management of the Exchange. The MOS requirements relate to all the dealing members of the Exchange and they address the five broad areas of manpower and equipment; organisational structure and governance; effective processes; global competitiveness; and technology.

    A new rule on the revocation of dealing licences and expulsion of inactive firms, which came into effect on June 29, empowers the Exchange to revoke the licence of any dealing member that has been inactive for six consecutive months.

    According to the rule, under no circumstances shall a dealing member cease to carry out its day-to-day business activities for which it was licensed to operate without any reasonable cause. A dealing member may be deemed inactive voluntarily and involuntarily.  Voluntary inactivity occurs where the firm has not recorded any trading activity without being suspended by the Exchange or SEC. Involuntary inactivity occurs where the firm has been suspended by the NSE or SEC for any infraction.

    Also, under the new amendments, the suspension of any stockbroking firm by SEC will lead to immediate suspension by the NSE. Revocation of any broker’s registration will lead to expulsion of the firm by the NSE.

    ”Where a Dealing Member’s registration is revoked by the Commission, as soon as the Exchange  is  notified,  it  shall  immediately  commence  the  process  of  expulsion  of  the dealing member,” the rules states.

  • SEC prepares to launch new corporate governance code for capital market

    Securities and Exchange Commission (SEC) is concluding arrangements for the launching of a new code of corporate governance for the Nigerian capital market.

    Director-General, Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, said the new corporate governance code for the capital market would soon be launched.

    “We don’t want to launch this code and there would be difficulties and so we need to put deliverables in place. One of the things that we have done is training and so far over 70 per cent of quoted companies have attended that training,” Gwarzo said.

    He said the Commission will embark on enlightenment campaign to ensure the issue of good corporate governance is taken to the next level.

    He called for a strict compliance with corporate governance codes by companies operating in the country.

    He expressed the readiness of SEC to collaborate with relevant bodies to ensure good corporate governance in the nation’s capital market.

    Gwarzo, who spoke while receiving executives of the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) at the Commission’s headquarters in Abuja, noted that ICSAN as an institute has vital roles to play in the promotion of corporate governance in Nigeria.

    “We have very onerous responsibilities to enforce the corporate governance and in doing this, collaboration is very important. When you look at the market, our scope is wide, apart from the quoted companies you are also looking at about 800 or 1000 operators. When we finish with the quoted companies we also want to extend the code and the compliance to all registered operators,” Gwarzo said.

    The ICSAN President, Mr Nat Ofo while speaking at the meeting expressed the readiness of the institute to partner with the commission.

     

     

     

  • SEC canvasses issuance of national Sukuk bond

    SEC canvasses issuance of national Sukuk bond

    Securities and Exchange Commission (SEC), Nigeria’s apex capital market regulator, has called for issuance of issuance of a sovereign Sukuk bond by the Federal Government to deepen the fledgling alternative finance market in Nigeria.

    Director General, Securities and Exchange Commission (SEC), Mr Mounir Gwarzo, said the Debt Management Office (DMO) should consider issuance of Sukuk bond on behalf of the Federal Government. DMO oversees and issues sovereign debt issues on behalf of the Federal Government.

    At a parley with the Director General of Debt Management Office (DMO), Dr. Abraham Nwankwo, SEC noted that a major plank of the 10-year capital market master plan, which the apex regulator is currently implementing, is the development and deepening of the non-interest capital market in Nigeria.

    Unlike interest-paying conventional bond issue, Sukuk makes returns to the investors through sharing of profit or cash flow from the underlying asset with them in addition to redemption of the principal upon maturity. Nigeria currently has only one Sukuk bond issued by the Osun Sate Government.

    Gwarzo said the issuance of Sukuk by the central government would not only provide a benchmark for other issuers of Sukuk like state governments but will also be in line with global trends.

    Annual Sukuk issuances have grown from $15 billion in 2008 to almost $120 billion in 2014. This is growth is not only coming from the usual issuers like Malaysia, Saudi Arabia, the United Arab Emirates (UAE), Turkey and Indonesia. In 2014, countries such as the United Kingdom, Hong Kong and Luxemburg, including peer African countries like Senegal, South Africa issued their debut Sukuk.

    Gwarzo expressed optimism that Nigeria has potential to become a global leader in Sukuk and non-interest financial market and urged the DMO to contribute to actualizing that aspiration by issuing sovereign Sukuk for Nigeria.

    SEC’s Rules on Sukuk Issuance in Nigeria underline that Sukuk shall be structured as Sukuk Ijarah – leased contract; Sukuk Musharakah– sharing contract; Sukuk Istisnah–  exchange contract; Sukuk Murabahah– financing contract; and any other form of contract that may be approved by the Commission.

    According to the rules, eligible issuers of Sukuk include public companies including Special Purpose Vehicles (SPVs), State Governments, Local Governments, and Government Agencies as well as multilateral agencies.

    The rules stipulate that any issue, offer or invitation of Sukuk by a public company which is capable of being converted or exchanged into equity with the intention of being listed shall be subjected to the additional requirements stipulated in the listing requirements of a securities exchange.

    Both SEC and DMO agreed to work in synergy for the growth and development of Nigeria’s financial system, particularly, the domestic bond market.

    Gwarzo applauded the DMO’s role in the ongoing restructuring of loans owed by state governments while emphasizing the need for closer collaboration between SEC and DMO to catalyze the development of the bond market, including the non-interest segment.

    So far, the DMO has been able to convert about N575 billion in state government loans into longer tenured debt instruments.

    Gwarzo pledged further support from the SEC to ensure states enjoy a cost effective restructuring as well as reduced debt-servicing burden.

    While outlining a number of initiatives which require closer collaboration with the DMO to achieve, the SEC DG applauded the role DMO plays in sustaining the Irrevocable Standing Payment Order (ISPO) framework which has been critical for investor confidence in the domestic bond market.

    He urged the DMO to focus on conducting more robust debt sustainability analyses for the states in line with its mandate enshrined within the DMO Establishment Act 2003.

    Both institutions agreed to work together to avoid crowding-out effect by Federal Government bond issues by ensuring that states and companies also have easy access to long term capital.

    With increasing interest from multilateral institutions in the domestic bond market, both SEC and DMO emphasized the need for synergy to efficiently coordinate such applications. The World Bank’s private sector arm, International Finance Corporation (IFC), and the African Development Bank (AfDB), have both issued naira-denominated bonds within the past two years. Both multilateral development finance institutions have also expressed interest in registering medium term note programmes that ensure periodic issuances to deepen the bond market.

    The two institutions agreed to strengthen the interagency team already in place and ensure that issues concerning the development of the bond market are jointly addressed.

  • SEC, ICSAN partner to promote corporate governance

    The Security and Exchange Commission (SEC) and Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) have said they plan to partner on the core values of corporate governance.

    The partnership is expected to broaden the scope of business entities nationwide and also boost service delivery.

    ICSAN President, Dr. Nat Ofo who spoke during a courtesy visit to SEC Director-General, Mr Mounir Gwarzo in Abuja said the partnership was important towards implementing the mandates of the commission.

    According to him, such collaboration would sustain transformation drive of President Muhammadu Buhari.

    He added that the institute was in a good position to “help SEC entrench its core values.”

    He suggested corporate governance audit be introduced to all corporate bodies to ensure better service delivery and best practices.

    “SEC has to show that it is active, it has to make noise and that can be done through the launching of it scorecard initiative,” he said.

    In his remarks, Mr Gwarzo acknowledged the partnership, stressing that it was vital for the smooth operations of the commission.

    He said SEC and the institute have the same responsibility to promote corporate governance.

    He said: “All over the world, robust corporate governance is what people are focusing on. They are looking beyond financial success and moving towards entrenching corporate governance. This administration has been preaching the need to always do the right thing and that is what real corporate governance entails.”

     

  • Need for SEC to check shareholders’ gangsterisms at AGMs

    For the purpose of providing a basic background knowledge, the annual general meeting, often abbreviated as AGM, is a mandatory yearly gathering of a publicly quoted organization’s directors, executives and shareholders. It is officially the only time the shareholders and the board of a company meet in the year to interact on well laid out businesses. However, if there is any urgent matter which a company needs to resolve in between AGMs, it may call an extra-ordinary general meeting.

    For any AGM to hold, the Securities and Exchange Commission (SEC) in Nigeria requires that a 21-day notice detailing the date, venue, time and businesses to be transacted be statutorily issued to the public, especially to the shareholders, by the company through, at least, two newspapers with good national reach.

    At such a meeting, the directors and the chief executive officer are typically expected to present the company’s annual report of the immediate past financial year detailing its performance and strategy to the shareholders. Where issues raised do not meet the expectations of the shareholders, no matter how ugly and annoying such could be, they are put to vote and here, a simple majority carries the day on any such issue(s). The provision and the power of the voting practice to resolve any contentious issue at any point of the meeting, one may want to infer, is to forestall a situation where any individual or a group of persons hiding under the guise of any association or body would want to unduly hijack and frustrate the meeting to fulfil a selfishly orchestrated and ingrained vendetta at a presumed ‘enemy’ shareholder, board or company executives that do not believe in unofficial practices.

    Whereas the above was supposed to be the case at meetings, some shareholders have taken it as self-appropriated rights to openly harass, abuse, insult and call directors and company executives all sorts of unprintable names to the point of hijacking the meeting to the utter distaste of the majority of other fellow shareholders. Where they eventually fail to achieve their selfish desires during the life of the meeting, they resort to using the media channel to blackmail the company with calls on regulators not to recognize meetings that were constitutionally and successfully held, attended and monitored by concerned regulatory authorities. Today, the fear of such shareholders is often thick in the air whenever an AGM comes up in any company’s plan in the country. It is not unlikely that some companies’ executives that choose to hold their AGMs at farther away and impossible locations which will not be cost effective for most shareholders to access do so to avoid being verbally and almost physically assorted.

    There is an argument by some concerned schools of thought that whereas there are regulatory laws which protect the shareholders against a company, its directors and executives, there are no known laws which check the actions and activities of the shareholders at meetings. Analysts in these schools of thought believe that shareholders merely capitalize on this regulatory lacuna to make themselves controlling lords at meetings with unchecked freedom to be hostile towards anyone, especially companies’ directors and chief executives, calling them unprintable names and still walk out unchecked to use the media to instigate further public blackmail.

    Now, do the shareholders have rights or interests to be protected by laws? Unarguably Yes! However, just as they deserve to be protected, the companies and their directors equally deserve to be covered by laws that protect them against the selfish activities of such few unruly shareholders.

    Going by the level this trend of impunity is attaining, it is urgently important to call on a few appropriate government agencies to put a rein on the clandestine activities of this tiny section of the shareholders’ community. First, SEC must necessarily and quickly work at providing rules which should henceforth guide shareholders’ conducts at meetings. Also, it should closely investigate and monitor activities of these few shareholders who are in the habit of putting undue pressure on company managements prior to AGMs to pursue their selfish interest which, to them, is of more importance rather than the overall interest of the company and the generality of other shareholders. Where such interests are not met, they had always ensured unruly behaviour and conduct at the general meetings.

    Furthermore, government’s appropriate agencies should carry out investigations into the existence of these few associations under which they hide to perpetuate their activities with a view to finding out whether they were duly registered. This will help check the excesses of such pockets of shareholders whose stock in trade is to lay claims to belonging to avalanche of shareholders’ associations in furtherance to the pursuit of their clandestine interests.

    Also, notable shareholders’ associations headed by honest and frontline shareholders like Sir Sunny Nwosu, Dr. O . Oniwinde, Mr. Timothy Adesiyan and Mr. Boniface Okezie, to list but this few, should take it upon themselves to check the activities of these mushroom associations being set up as machineries to extort gratifications from listed companies.

    The earlier SEC, other appropriate government agencies and the frontline  shareholders  do the above, the better it would be before these few self-seeking shareholders who carry out their trades with impunity turn AGMs to ugly scenes and threatening events to authorities of publicly quoted companies and other law-abiding shareholders. A stitch in time, it is said, saves nine.

     

    • Kayode Michael is an investment expert and analyst based in Ikeja, Lagos.
  • Perm Sec visits robbed herdsmen

    Perm Sec visits robbed herdsmen

    The Federal Capital Territory (FCT) Permanent Secretary, Mr. John Chukwu has paid a condolence visit to Fulani herdsmen who were attacked by armed robbers in the Ketti-Pyakassa suburb of Abuja.

    Chukwu condemned the attack and urged the victims to be calm as security agencies were working round the clock to fish out the perpetrators.

    Unknown hoodlums attacked the Fulani community, killing seven persons.

    Chukwu also visited the National Hospital Abuja where three injured persons including a baby were  receiving treatment.

    He also called at the scene of the unfortunate incident in the company of some senior officials of the FCT Administration to commiserate with the victims.

    The Permanent Secretary during the visit directed that two other injured persons receiving treatment in a village hospital be immediately transferred to the Asokoro District Hospital for adequate medical care.

    Chukwu assured that the FCT Administration would pay all the medical bills of the injured persons being treated.

    He prayed for the repose of the souls of the deceased persons who lost their lives in the unfortunate incident as well as for the quick recovery of the injured persons.

    While commending the police  for the prompt response, he called on them to hasten their investigations in order to bring to book all those culpable.

    Chukwu reiterated that the government would surely get to the root of the crime; stressing that the perpetrators would definitely be apprehended and prosecuted.

    He said, “The Health and Human Services Secretariat, the Area Council Services Secretariat and the FCT Emergency Management Department are hereby directed to immediately liaise with the National Hospital as well as the relations of the victims to pick all medical bills of the injured and sparing no cost in treating them.”

    He advised the victims to be calm, not to take the laws into their hands as the Security Agencies are already assiduously working to unravel all those behind it.

    Responding on behalf of the victims, the Ardon Fulanin Garki, Alhaji Kogi Salihu appreciated the sympathy visit by the high-powered delegation of the FCT Administration and promised to remain calm and law abiding.

    Salihu said, “We are really glad that the FCT Administration leadership has promptly responded to our plight because this is indeed a time of need,”

    He prayed for the guidance and the well being of President Muhammadu Buhari to continue to steer the affairs of the country as this ‘uncommon’ visit demonstrates the change mantra of the Federal Government.

    In order to further calm down nerves and maintain peace in the FCT Chukwu has had an emergency meeting with some leaders of the victims of the armed robbery attack in Pyakassa to avoid any reprisal.

    The Permanent Secretary, who had the emergency meeting in his office, emphasized the need to maintain law and order, assuring that the perpetrators would definitely be apprehended and therefore nobody should take the laws into their hands.

    Chukwu reiterated that the Police and other security agencies in the Federal Capital Territory are on top of the situation.

    Meanwhile, The Permanent Secretary has directed the Area Council Services Secretariat to organise stakeholders meeting with the herdsmen dwelling in and around the Federal Capital City, Abuja scheduled for next week.

    According to him, the main issue to be discussed at the meeting is on how to permanently put a stop to the knotty cases of grazing of cattle within the City Centre.

    He affirmed that after the stakeholders meeting, the FCT Administration would have reached an understanding on how to permanently solve the problem of grazing cattle in the city centre.

    He remarked that this would be an enlarged meeting between the FCT Administration and the Fulani herdsmen as well as their leaders in the Federal Capital Territory.

    The Permanent Secretary insisted that grazing of cattle in the city centre and along the Airport Expressway must be stopped because there are designated grazing areas in Paikon-Kore, in the Gwagwalada Area Council of the Territory, which according to him, is underutilized.

     

  • Court rules on BGL case vs SEC Nov 27

    Justice Mohammed Idris of a Federal High Court in Lagos has fixed November 27, for ruling in the suit filed against the Securities and Exchange Commission (SEC) by BGL Group.

    In a fresh application argued on Wednesday by its counsel, Mr. Kemi Pinheiro (SAN), BGL is seeking an order to nullify the two rulings made on September 17, 2015 by Justice Mohammed Yunusa.

    Yunusa, who sat as a vacation judge, had in the said rulings vacated an interim injunction barring SEC from expelling BGL from capital market.

    The vacation judge also dismissed BGL’s application seeking to stay further proceedings in the matter.

    But in the fresh application Pinheiro is contending that as of the time that Yunusa gave the rulings, he no longer had jurisdiction.

    Pinheiro argued on Wednesday that Yunusa’s jurisdiction on the case, as a vacation judge, had ended on September 11 and maintained Yunusa had been drained of jurisdiction as of September 17 when he made the two rulings.

    He urged the new judge on the case, Justice Idris, to vacate those two orders.

    Yunusa had on September 22, when he was due to deliver a third ruling in the case, told the parties that the case file had been returned to the Chief Judge of the Federal High Court, Justice Ibrahim Auta, for re-assignment to another judge.

    At the resumed proceedings before Justice Idris last Wednesday, Pinheiro said, “Justice Yunusa was constituted as a special court. His jurisdiction to entertain cases is not at large.

    “On September 17, the purported vacation court proceeded to deliver a ruling outside of jurisdiction.

    “The question before the court is to determine whether the ruling of September 17 was legal or not, when the court vacation had ended on September 11.

    “Our application is not to seek for the appeal of what took place brother your learned brother, Yunusa, but we are urging Your Lordship to set aside every proceeding that were taken outside of jurisdiction because Justice Yunusa had been drained of jurisdiction.”

    But in opposition, counsel for SEC, Prof. Kayinsola Ajayi (SAN), described BGL’s application as an abuse of court processes, which was incurably bad and could not be remedied.

    Ajayi said there was nothing like vacation jurisdiction, adding that the only factors that could affect the right of a judge to hear a case would be whether the judge was indeed a judge, whether the subject matter was within his purview and the case fell within the territory of the court.

    He further maintained that the arguments which led to the September 17 rulings were taken prior before that date, adding that the date for ruling was chosen by the consent of the two parties.

    He accused the BGL counsel of bogging down the case during vacation, recalling that they had once said they brought an application “to frustrate the proceedings” during vacation.

    “The conduct of the plaintiffs is one that demonstrates that the court should not demonstrate discretion in their favour.

    “The plaintiffs have not come with clean hands,” Ajayi.

    After listening to the parties, Justice Idris fixed November 27, 2015 for ruling.

    BGL had in May filed the suit before Justice Saliu Sadiu to challenge its proposed expulsion from the capital market by SEC.

    The SEC had announced the expulsion of BGL from the Nigerian capital market after receiving over 40 petitions from aggrieved investors who claimed to have been defrauded by the company.

    BGL’s Group Managing Director, Albert Okumagba, was also banned from operating as a Registered Sponsored Individual with SEC.

    In its preliminary objection to the suit, SEC alleged that BGL is indebted to various capital market investors, including the Rivers State Ministry of Finance to the tune of  N5.8bn as of  June 2, 2015.

    SEC further claimed that as of December 2014, BGL had run at a loss running into over N48bn, adding that BGL had severe liquidity problems.

     

  • SEC moves to widen Sukuk bond issuance in Nigeria

    Securities and Exchange Commission (SEC) has launched a major initiative to expand the scope of alternative finance, especially issuance of Sukuk bond, in the Nigerian capital market.

    Unlike interest-paying conventional bond issue, Sukuk makes returns to the investors through sharing of profit or cash flow from the underlying asset with them in addition to redemption of the principal upon maturity.

    SEC’s Rules on Sukuk Issuance in Nigeria underline that Sukuk shall be structured as Sukuk Ijarah – leased contract; Sukuk Musharakah– sharing contract; Sukuk Istisnah–  exchange contract; Sukuk Murabahah– financing contract; and any other form of contract that may be approved by the Commission.

    According to the rules, eligible issuers of Sukuk include public companies including Special Purpose Vehicles (SPVs), State Governments, Local Governments, and Government Agencies as well as multilateral agencies.

    The rules stipulate that any issue, offer or invitation of Sukuk by a public company which is capable of being converted or exchanged into equity with the intention of being listed shall be subjected to the additional requirements stipulated in the listing requirements of a securities exchange.

    SEC on Monday hosted a regional round table on non-interest capital market in Kano with the theme: Financing Development through Islamic Capital Market – A Viable Alternative.

    Director General, Securities and Exchange Commission (SEC), Mounir Gwarzo, said the apex capital market regulator would work to deepen the nascent Sukuk bond market noting that Nigeria has the potential to be a major issuer of Sukuk bonds. Nigeria currently has only one Sukuk bond issued by the Osun Sate Government.

    According to him, SEC would focus on Sukuk, one of the most important components of the Islamic financial system. The global sukuk market continues to witness remarkable growth since after the 2008 global financial crisis as annual issuances have grown from $15 billion in 2008 to almost $120 billion in 2014.

    “In fact, last year is widely considered a landmark year for Islamic finance, especially with landmark debut sukuk issuances by countries such as the UK, Hong Kong, Senegal, South Africa,  and Luxemburg. Of course the year witnessed continued strong interest from key markets of Malaysia, Saudi Arabia and the United Arab Emirates (UAE) and emerging markets like Turkey and Indonesia. There is no doubt that the sukuk market is emerging on a global scale as a viable alternative source of funding”.

    While describing Malaysia, Saudi Arabia, UAE, Kuwait and Qatar as the top five largest Islamic finance markets in the world as they account for the highest sukuk issuances and contribute more than half of the total assets under management in the industry, Gwarzo said that with Nigeria’s population which is far more than all five countries put together, the country should be a major market for global Islamic finance market.

    “With over 80 million Muslims, Nigeria is home to far more Muslims than all the five countries put together. Additionally, Nigeria has a larger economy than them, with the exception of Saudi Arabia. There is therefore no reason why Nigeria should not be a major global Islamic finance market” Gwarzo said.

    He reiterated the Commission’s commitment to deepening the non-interest capital market space so as to enable millions of Nigerians and people of faith to invest their savings ethically.

    He noted that investors worldwide are increasingly allocating their resources into Islamic a finance products adding that by the end of 2014, total assets under management in the global Islamic finance industry surpassed $2 trillion.

    Gwarzo said while most people identify capital markets as an important source of medium-to-long term capital flow, there is also an amazing potential of capital markets to serve as a catalyst for financial inclusion adding that going forward, the SEC will focus on massive public enlightenment and also stronger capacity building initiatives.

    He outlined that SEC had in 2013 set up an industry-wide committee of experts to develop a strategic blueprint for the growth and development of Nigeria’s non-interest capital market and their recommendations have been incorporated in the 10-year capital market master plan which is currently being implemented by the SEC.

    According to him, the master plan sets a strategic direction for the non-interest capital market in Nigeria to attain at least 25 per cent of total market capitalization.

    “The development of Islamic capital markets has been a key concern of global securities regulators since the turn of the 21st century. In 2002, the International Organizations of Securities Commissions (IOSCO) set up a Committee on Islamic Capital Market in which Nigeria actively participated. Since then, the SEC has implemented a number of reforms aimed at deepening the non-interest capital market” Gwarzo said.

    Governor of Kano state, Dr Abdullahi Umar Ganduje commended the efforts of the Commission in the area of promoting depth in non-interest capital market.

    He said Kano State would like to be seen as a base of Islamic banking and finance for financial market development.

    Former Governor of Central Bank of Nigeria and the Emir of Kano, Muhammad Sanusi II, said the apex bank had been able to put some solid structures in place for non-interest banking system in the banking industry.

    He said the CBN, under his leadership, put in place appropriate frameworks, rules and institutions to ensure that the emerging alternative finance market stands on a sound footing.

    He therefore called on the policy makers to realise and appreciate the role of non-interest capital market in bridging the gaps in the nation’s financial institutions.

     

  • SEC approves N53.65b new issues

    SEC approves N53.65b new issues

    The Securities and Exchange Commission (SEC) has approved new issues worth N53.65 billion between January and September.

    According to its statistics, 10 firms indicated interest to access the primary market segment of the Nigerian Stock Exchange (NSE).

    A breakdown of the new issues indicated that the new issues dropped when compared with over N400 billion raised in the corresponding period of 2014.

    NAN reports that the firms that applied for the new issues during the period under review were Union Homes Savings and Loans, Notore Chemical Industries and Fortis Microfinance Bank.

    Others are Champion Breweries, Golden Capital, Jaiz Bank, Bankers Warehouse, Afrik Parmaciticulars, Stanbic IBTC Holdings and Riggs Venture West Africa.

    It was also reported that the approvals were for rights issue, special and private placements and Initial Public Offer (IPO).

    An analysis of the data showed that Union Homes, during the period was given an approval for a special placement of 781.25 million shares worth N5 billion at N6.40 per share.

    Fortis Microfinance Bank applied for private placement of 788 million shares valued N1.18 billion at N1.50 per share and Notore Chemical IPO of 371.59 million shares worth N19.59 billion at N52.72 per share.

    Champion Breweries applied for private placement of 629.49 million shares worth N1.16 billion at N1.85, while Jaiz Bank was given approval for rights issue of 2.96 billion shares at N1.30 per share, among others.

    Commenting on the new issues, Malam Garba Kurfi, Managing Director, APT Securities and Funds Ltd., who lauded the development, said the new issues were encouraging considering challenges in the economy.