The Nation Newspaper

Tag: Securities and Exchange Commission (SEC)

  • SEC to governors: You’re free to borrow but…

    SEC to governors: You’re free to borrow but…

    The Securities and Exchange Commission (SEC) has urged state governors to go ahead and borrow in order to augment the allocation but with a caveat: such borrowings must not be for consumption.

    A statement by the SEC Director General Mounir Gwarzo in Katsina at the SEC Day at the ongoing 18th Katsina State Trade Fair, he said cheap funds can be accessed through equities, bonds or mortgage bond securities.

    Represented by Head Kano Zonal office of SEC, Malam Adamu Sambo, Gwarzo, said the Nigerian capital market has the capacity to provide long term funds needed to solve the infrastructural challenges in the country and act as a springboard that would fast track development of their states.

    He disclosed that the Commission was attending the fair in order to manifest one of its broad functions which is to carry out enlightenment on the activities in the market.

    “We are here to enlighten the Katsina state government and its people on the need for them to take activities in the market as a means for development. We have a new government in place and we hope that they will access the capital market to raise floating funds to meet their development needs.

    “The President has already said he is keen on development of the country and we therefore urge the state governments to use the capital market as a channel to raise funds. States have a lot of potentials and we believe that they can use the capital market as one of the means of achieving their potential,” he said.

    He noted that both the federal and state governments in the last dispensation tasted the potential of the market as over N500 billion was raised from the nation’s bourse through bonds by various states for infrastructure development between 1999 and 2013. Gwarzo expressed dismay at the attitude of some state governments who claim they do not want to borrow funds for development in order not to leave the states with huge debts saying such attitude is counterproductive as it is better to borrow to meet infrastructural needs than to be contented with just paying salaries.

    He said “indebtedness is not bad, what is bad is a situation where such funds are used for consumption. If there is commensurate infrastructural development on ground, there is no regret in borrowing. Even abroad, states borrow for development.”

    Gwarzo therefore urged the state governments to embrace the capital market in their economic strategy in other to meet the needs and aspirations of their people.

  • Annual report: Firms opt for e-report, notice

    Annual report: Firms opt for e-report, notice

    Several companies might send their 2012 annual reports and accounts in electronic copies to shareholders as companies seek to cut costs of shareholders’ relations.

    Quoted companies and Securities and Exchange Commission (SEC) are seeking regulatory changes to pave way for unfettered take-off of electronic-reporting scheme.

    Companies had used their last annual general meetings to sensitize shareholders and seek necessary consents, prior to take-off of the e-reporting initiative.

    Shareholders of companies under the UAC of Nigeria (UACN) Group including UAC of Nigeria, CAP Plc, and UACN Property Development Company (UPDC) had at the yearly general meetings of the companies considered amendments to the articles of association of the companies to enable the companies send annual reports and accounts and other notices through compact disc, electronic mail or web publication in addition to existing option of hard printed copy.

    Cadbury Nigeria had earlier notified that it would now distribute its audited reports and accounts and other related documents in soft electronic format rather than in paper form.

    The company said the decision to use compact disc to distribute information to shareholders was part of its desire to ensure the sustainability of environment and align with international best practice.

    According to the company, to ensure fairness and equity, shareholders will be given the option of requesting for a paper copy of these documents by exception, if they determine that they do not want to receive same in a CD format.

    Nestle Nigeria has also said it was introducing electronic delivery of annual reports and other corporate documents to ensure quick and effective access to information.

    At its last general meeting, Nestle Nigeria provided shareholders with an electronic mandate form, which would legally allow the company to send soft edition of its reports online through email address or compact disc. Nestle Nigeria’s shareholders would also be able to download all the reports from web address to be provided by the company.

    The Securities and Exchange Commission (SEC) has requested the National Assembly to amend the Companies and Allied Matters Act (CAMA) 1990 to allow electronic shares issuance, dematerialization, electronic bonus and dividends among other initiatives.

    SEC has sought for amendments to section 117 of CAMA, which gives companies the general powers to issue shares and section 125, which makes provisions relating to allotment of shares and issuance of share certificates to allow electronic issuance and allotment.

    According to SEC, these amendments would allow companies to electronically issue shares through CSCS accounts, which would enhance the dematerialisation of paper share certificates.

    SEC called for general review of sections 114 to 165 of CAMA.

    The apex capital market regulator also wanted the legislators to amend section 220 of CAMA, which provides for service either by giving the member personally or sending it to him by post or to his registered address to provide for service of notices electronically in the first instance where a member has provided an email address as a means of communication and the definition of registered address should include an electronic address.

    “Sections 83 and 84 should recognise the use of electronic registers as a mandatory backup and provide for a location of that register securely on independent servers or disks not in the premises of the company or the registrar,” SEC stated.

    SEC also called for amendment of section 379 on dividends to allow for electronic payment of dividends and subsequently full automation of dividend payment after expiration of a grace period.