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Tag: Securities and Exchange Commission

  • SEC urges beneficiaries of deceased investors to claim their dividends

    In a bid to further reduce the quantum of unclaimed dividends in the Nigerian capital market, the Securities and Exchange Commission, SEC, has urged beneficiaries of deceased investors to step up efforts to claim such dividends.

    This was stated by the Acting Director General of the SEC, Ms Mary Uduk in her welcome remarks at the enlightenment programme for Lagos State Probate Registry in Lagos, Tuesday.

    Uduk who was represented by Acting Executive Commissioner Operations of the SEC, Mr. Isyaku Tilde, said the purpose of the enlightenment programme is to give participants an understanding of the operations of the capital market, especially in the area concerning transmission of shares and administration of estate, areas in which the Probate Registry is a key stakeholder.

    Uduk stated that one category of investors whose investment yields have contributed to the growth of unclaimed dividends are deceased investors, whose beneficiaries as indicated in the will or letter of administration are yet to claim the investments and accrued dividends through the share transmission process.

    According to her, “The capital market is a market for raising medium to long term capital via a number of instruments. The most popular of the instruments are shared and bonds with resultant yields of dividends and interests respectively.

    “However, the quantum of unclaimed dividends in the Nigerian capital market has been on the increase as investors fail to claim the dividends from their investment in shares.”

    Read Also: ‘Reliable data key to creative sector growth’

    Uduk also congratulated the Probate Registry on the recent commissioning of the e-filing probate registry saying it will guarantee integrity of data, provide for online tracking of applications, simplify and shorten the application process of Letter of Administration and grants.

    She therefore restated the readiness of the SEC to collaborate with the Probate Registry staff so that together the Nigerian capital market can become a desirable investment destination.

    In a keynote address, Hon. Justice A.A. Oyebanji who represented the Chief Judge of Lagos state, commended the SEC on the enlightens programme which she said will go a long way in aiding the staff of the probate registry on the discharge of their duties.

    Oyebanji said the Registry processed legal instruments for the administration of the real and personal estate of a deceased person who was resident in Lagos state and who owned landed properties in Lagos state.

    She disclosed that the Probate Registry in Lagos state is now fully. Computerised and all applications must be made online.

    “This e-Probate system was introduced primarily to ensure a more efficient delivery of services to elements of the public. It is aimed at reducing significantly the length of time required to obtain a Grant, whether in the Ikeja of the Lagos Division” she added.

     

     

  • Lagos “ponzi” firm shut

    Securities and Exchange Commission (SEC) has sealed up the premises of an Ikeja, Lagos-based firm, Growing Circle International (G-Circle) for allegedly engaging in ponzi scheme.

    In a circular, SEC stated that it conducted surveillance on the activities of G-Circle after it received complaint from a member of the public.

    According to the Commission, investigation revealed that G-Circle was operating a pyramid scheme and soliciting funds from unsuspecting members of the public through various means including its website www.growingscircle.com.

    SEC stated that it sealed up the premises of G-Circle in Lagos in line with its commitment to protect the investing public.

    “The Commission wishes to inform the general public that Growing Circle International and any individual representing the company are not registered by the Commission and therefore not permitted to engage in any capital market-related activity in Nigeria,” SEC stated.

    The apex capital market regulator advised investing public to confirm the registration status of any company, individual and the products they offer before entering into any transaction with such persons. Such confirmation can be done on the SEC’s website.

  • Electronic offerings to use USSD, mobile devices

    The Securities and Exchange Commission (SEC) has released draft guidelines for transition to electronic offering of shares and other securities in the  capital market.

    Electronic offering (e-O) is the use of internet or other electronic means, including mobile or Unstructured Supplementary Service Data (USSD) platforms to provide access to prospectuses, offering memoranda, subscription forms and other documentation for the subscription to securities and related documentation as well as payment for such subscription.

    Electronic offering will be done on a platform purposely established by an eligible service provider registered with SEC.

    In a circular, SEC said the electronic offering platform will translate the current paper-based process of securities offerings into electronic form through electronic display of offer documents, subscription and payment through a combination of web portals, mobile applications, USSD and other electronic means.

    Under the electronic initial public offering (e-IPO) and other electronic public offers, investors will be able to get allotment and value for their subscriptions within few days as against the current cycle of nearly four months.

    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) and any other designated clearing centre.

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

    According to the draft guideline, the e-Offering platform shall give subscribers access to general information regarding the offer, the application input screen, download, view and print the offer documents, provide for electronic online payment options, which shall be seamlessly integrated with the e-offering platform, allow integration with identity management systems such as Bank Verification Number (BVN) database for the purpose of Know Your Customer verification and integrate with the depositor to enable electronic crediting of approved allotments to subscribers’ depository accounts.

    The platform shall also permit subscribers to select a broker of their choice for the purpose of the electronic crediting of the approved allotment, while providing mandatory information fields for subscribers to supply surname and other names, full company name and registration number, BVN or any other SEC-approved biometric numbering system, bank name and account numbers of subscribers and mobile telephone number and email address.

    The platform is also expected to provide for the upload of provisional rights allocation for rights issues by the relevant registrar to the issue.

    In order to strengthen investors’ protection, the e-O platform must mandatorily require subscribers and end-users to confirm that the subscriber has been provided with sufficient opportunity to access the offer documents and the information disclosed therein and that the information provided by the subscriber is to the best of the applicant’s knowledge, true and accurate in all material respects before submitting the application.

    The e-O platform will also permit subscribers to print a copy of the relevant application screen or page containing the details of information submitted by the subscriber.

    The e-O platform is also expected to provide instructions and information for subscribers outlining the procedures and any requirements subscribers shall comply with in order to use the platform as well as the process and procedure a subscriber shall follow to make a valid application.

     

  • Court affirms SEC’s regulatory oversight on public firms

    The Court of Appeal has reiterated the Securities and Exchange Commission’s powers to intervene in the management and control of any public company which is considered to have failed, failing or is in crises.

    The SEC is statutorily mandated as the apex regulator of the Capital Market to ensure the protection of investors and maintain a fair, efficient and transparent market.

    Recall that in 2008, the SEC conducted an investigation on Big Treat Plc, a public listed company (1st Respondent) and its directors which revealed several infractions of the Investments and Securities Act, 2007 such as inadequate internal control systems and a breakdown of corporate governance in the company.

    Based on the foregoing, and pursuant to the provisions of Section 13 (v) of the ISA 2007, the Commission in 2010 approached the Federal High Court seeking a number of reliefs against Big Treat Plc (1st Respondent), three of its directors – Pamela Wu, Harries Wu, Steve Wu – and two entities owned by them – New Frontier Engineering and Construction Company Ltd and Skyone Group of Companies Ltd, with a view to preserving the assets of the 1st Respondent.

    In the course of the proceedings, the Commission applied for and was granted an ex-parte order of interim injunction restraining the 2nd– 6th Respondents, their agents, servants or privies from obstructing the Commission in the exercise of its statutory oversight responsibilities to the 1st Respondent, including the appointment of an interim management to take charge of the day-to-day administration of the 1st Respondent with a view to preserving its assets in the interest of its stakeholders pending the determination of the Motion on Notice already filed in this suit.

    However, the ex-parte order was subsequently vacated on the grounds that the 1st Respondent (Big Treat Plc) “was not a capital market operator amenable to the control and management of the appellant in term of financial distress”.

    The Commission appealed against the decision of the Federal High Court and the sole issue for determination, as raised by the Commission before the Court of Appeal was “whether the lower court was right when it held that the 1st Respondent (Big Treat Plc) is not a capital market operator because it does not play any specific role in the capital market and as such, not registerable or subject to the control of the Appellant (the Commission)”.

    The Court of Appeal in a judgment delivered on 31st January 2019, held thus;

    “That the 1st Respondent, an issuer of securities, having been duly registered with the Appellants and was at all material times performing the specific function of issuing securities in the capital market, was subject to the intervention of the statutory powers of the Appellant as the pinnacle regulatory authority for the Nigerian capital market whose sole purpose is to ensure the protection of investors and to maintain fair, efficient and transparent capital market, as well as reduction of systemic risk as stated in the preamble of the ISA- the beacon light to the powers of the Appellant under the ISA.”

    The Court of Appeal further held that;

    “In conclusion, I most respectfully hold that the court below should not have vacated the interim preservative order made by it to protect the imminent collapse of the 1st Respondent but the Appellant who at all material times was exercising statutory powers under the ISA to stem the tide of decay in the internal management of the 1st Respondent…”

  • Court reaffirms SEC’s regulatory oversight over public companies

    The Court of Appeal has reiterated the Securities and Exchange Commission’s powers to intervene in the management and control of any public company which is considered to have failed, is failing or is in crises.

    The SEC is statutorily mandated as the apex regulator of the Nigerian capital market to ensure the protection of investors and maintain a fair, efficient and transparent market.

    Recall that in 2008, the SEC conducted an investigation on Big Treat Plc a public listed company (1st Respondent) and its directors which revealed several infractions of the Investments and Securities Act 2007 such as inadequate internal control systems and a breakdown of corporate governance in the company.

    Based on the foregoing, and pursuant to the provisions of Section 13 (v) of the ISA 2007, the Commission in 2010 approached the Federal High Court seeking a number of reliefs against Big Treat Plc (1st Respondent), three of its directors – Pamela Wu, Harries Wu, Steve Wu – and two entities owned by them – New Frontier Engineering and Construction Company Ltd and Skyone Group of Companies Ltd with a view to preserving the assets of the 1st Respondent.

    In the course of the proceedings, the Commission applied for and was granted an ex-parte order of interim injunction restraining the 2nd– 6th Respondents, their agents, servants or privies from obstructing the Commission in the exercise of its statutory oversight responsibilities to the 1st Respondent including the appointment of an interim management to take charge of the day to day administration of the 1st Respondent with a view to preserving its assets in the interest of its stakeholders pending the determination of the Motion on Notice already filed in this suit.

    However, the ex-parte order was subsequently vacated on the grounds that the 1st Respondent (Big Treat Plc) “was not a capital market operator amenable to the control and management of the appellant in times of financial distress”.

    The Commission appealed against the decision of the Federal High Court and the sole issue for determination as raised by the Commission before the Court of Appeal was “whether the lower court was right when it held that the 1st Respondent (Big Treat PLC) is not a capital market operator because it does not play any specific role in the capital market and as such, not registerable or subject to the control of the Appellant (the Commission)”.

    The Court of Appeal in a judgment delivered on 31st January 2019, held thus;

    “That the 1st Respondent, an issuer of securities, having been duly registered with the Appellants and was at all material times performing the specific function of issuing securities in the capital market was subject to the intervention of the statutory powers of the Appellant as the pinnacle regulatory authority for the Nigerian capital market whose sole purpose is to ensure the protection of investors and to maintain fair, efficient and transparent capital market as well as reduction of systemic risk as stated in the preamble of the ISA- the beacon light to the powers of the Appellant under the ISA.”

    The Court of Appeal further held that;

    “In conclusion, I most respectfully hold that the court below should not have vacated the interim preservative order made by it to protect the imminent collapse of the 1st Respondent but the Appellant who at all material times was exercising statutory powers under the ISA to stem the tide of decay in the internal management of the 1st Respondent…”

  • ‘Revitalise moribund industries through capital market’

    The Securities and Exchange Commission, SEC has urged state governments to take advantage of the enormous opportunities available in the capital market to revitalise moribund companies in their state in a bid to create wealth for the citizens.

    Acting Director General of the SEC, Ms Mary Uduk stated this in Akure, at an e-dividend enlightenment campaign, Thursday.

    Uduk represented by Head, Zonal Offices Coordinating Department, Mr. Edward Okolo said some of the companies still have potentials adding that the capital has instruments to revamp such companies through private equity funding and partnerships.

    The Acting DG also urged investors to take advantage of the on-going e-dividend registration as well as the regularisation of multiple subscription accounts in a bid to reduce the unclaimed dividends profile and increase liquidity in the capital market and the economy.

    She disclosed that the forbearance window for shareholders with multiple subscriptions has been extended by another year from the December 31, 2018 deadline previously communicated and consequently, enjoined those who have not come forward for the regularization of shares purchased with multiple identities, to do so.

    According to her, “The essence of the E-Dividend Mandate Management System is to eradicate or reduce to the barest minimum the incidence of unclaimed dividend.

    “Unclaimed dividend is an undesirable feature of the Nigerian capital market which denies investors/shareholders the gains of participating in the capital market.”

    She also explained that it denies the economy access to the huge amount of money which should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy.

    She further added that: “It is a consequence of the bottlenecks which are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others.”

    The SEC boss stated that the E–Dividend regime bypasses these limitations by ensuring that dividends which do not exceed 12 years of issue are credited directly to an investors account after declaration by the paying company and within a stipulated payment period through simple interbank transfer.

    In his paper, Head of Lagos Zonal office of the SEC, Mr. Stephen Falomo said over the years, the quantum of unclaimed dividends, within the Nigerian Capital Market, has witnessed tremendous growth. As at January, 2018, the total amount was confirmed to be over N100bn.

    “Companies would continue to declare dividends, this figure is expected to further grow. The huge figure and continuous growth of unclaimed dividends clearly suggest an urgent need to stem trend,” he said.

    Falomo said the way out is for Nigerian investors to enroll for the e-dividend regime by completing an e-Dividend ‘Mandate Form’ and submitting same at the nearest branch of his/her Bank or Registrar’s office, for identity validation leveraging the BVN platform of the NIBSS.

  • SEC awaits merger application

    The Securities and Exchange Commission (SEC) was yesterday notified of the proposed merger between Access Bank Plc and Diamond Bank Plc, confirming an exclusively story reported by The Nation.

    The apex capital market regulator, however, clarified that the banks have not submitted formal application for merger, which will form the basis of regulatory approval.

    “The SEC received on Monday, Dec 17 2018, notice of intention by Diamond Bank and Access Bank to merge. The Commission is currently waiting for their formal application,” SEC stated.

    Under extant rules, mergers and acquisitions must be approved by SEC to kick-start the formal process of the transaction, following which the parties will approach the Federal High Court for an order to hold an extraordinary general meeting of their shareholders for their approvals. The Nigerian Stock Exchange (NSE) will also have to approve the merger while the Federal High Court must authorise the final approved merger documents to conclude the transaction.

    Investors appeared to respond positively to the business combination yesterday at the NSE as the share prices of the banks rose by nearly the highest daily allowable change at the stock market. Diamond Bank recorded the highest gain of 9.47 per cent to close at N1.04 while Access Bank followed with a gain of 9.40 per cent to close at N8.15 per share.

    Market sources said the price rally was stimulated by the prospects and consideration of the merger. According to the proposal, Access Bank will acquire the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger. Based on the agreement reached by the boards of the two banks, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of 2 new Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the implementation date.

    The offer represents a premium of 260 per cent to the closing market price of 87 kobo per share of Diamond Bank on the NSE as at the close of business on December 13, 2018, the date of the final binding offer.

    After the completion of the merger, Diamond Bank will be absorbed into Access Bank and it will cease to exist under law. The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective. Diamond Bank expects the transaction to complete in the first half of 2019.

  • SEC extends multiple subscription deadline to Dec 2019

    ……. Pledges to tackle identity theft

     

    In a move to ensure more investors regularize their accounts thereby reducing the volume of unclaimed dividends in the Nigerian capital market, the Securities and Exchange Commission, SEC has announced an extension of forbearance on such accounts to December 31, 2019.

    This among others was part of the decision reached at the end of the 3rd Capital Market Committee, CMC meeting held in Lagos, Thursday.

    Recall that the SEC had announced December 31st 2018 as deadline for regularization of multiple accounts.

    Briefing newsmen, Acting Director General of the SEC, Ms. Mary Uduk said the committee considered the issue and decided its best to give investors more time to regularize their multiple accounts in order to derive the benefits from their investments.

    She said “I am delighted to report that on the lingering issue of multiple subscriptions and forbearance for shareholders with multiple accounts, the CMC agreed that the forbearance window should be extended by another year from the December 31, 2018 deadline previously communicated. We expect investors to take advantage of this opportunity to claim their unclaimed dividends and bonuses”.

    Uduk also announced a two-pronged approach to addressing the intractable challenges associated with transmission of shares related to the estate of deceased investors. 

    “The first step would involve engagement with and enlightenment of the Probate Registry with a view to providing solutions to the cumbersome process of transmitting shares. 

    “Secondly, Rules would be developed around the time frame for transmission shares and the fee structure”

    Worried by issues of identity theft in the capital market, the Acting DG said the Commission will work with other major stakeholders in setting up a committee that will look into and proffer solutions to problems around identity management in the Nigerian capital market.

    Similarly, Uduk said as part of efforts to eliminate underhand dealings, the Commission is set to take enforcement actions against any persons engaged in trading in the shares of public unlisted companies outside a recognised securities exchange as provided by the Rules.

    On the need to grow the market for trading in securities on unlisted public companies, she said the Commission is making concerted efforts in collaboration with CAC and other stakeholders to assist public companies that are yet to register their securities to do so without much difficulty.

    “In furtherance of the commitment to develop a vibrant Commodities eco-system, the Commission has commenced the implementation of measures to strengthen regulatory capacity by establishing a Commodities Division. 

    Other recommendations of the Committee have been broken down into implementable plans with set timelines.

    “An interesting development in the commodities sector is the innovative solution developed by AFEX Commodities Exchange Limited (AFEX) and its partners regarding the use of Blockchain Technology to streamline the process of financing agriculture to Smallholder farmers and other players in the commodities markets” she added.

    In order to boost the e-dividend mandate and Direct Cash Settlement initiatives, Uduk said the Commission gave a commitment to the market that it would engage NIBSS (Nigeria Inter-Bank Settlement System) on behalf of the capital market community to facilitate identity validation and account validation in an effort to enhance market processes.

    She also disclosed that the market provided an update on the Electronic distribution of annual accounts by public companies to shareholders and it was reported that the shareholders have largely accepted the new initiative and are willingly providing their email addresses. It was agreed that further sensitization would be carried out by stakeholders to enlighten shareholders on the benefits of the initiative.

  • ‘We‘ve reduced transactions cost to attract investors’

    Ag. Director General, Securities and Exchange Commission, Ms. Mary Uduk, engaged the media after a meeting of the Capital Market Committee, where she addressed many issues, including cost of transactions. Moses Emorinken was there.

    The Capital Market Committee (CMC) has held its quarterly meeting in Lagos. What were the major highlights?

    The essence of this quarterly meeting is to identify challenges affecting operations/activities in the Nigerian capital market, and formulate solutions. This edition of the CMC meeting was no different as participants identified various issues that required extensive reviews and attention. Some of them are e-annual reports, extension of forbearance for multiple share subscription, progress in e-dividend registration, constitution of a committee on FinTech and the implementation of recommendations of various committees among others.

    How far has the implementation of e-annual report gone?

    Over one year ago, the Securities Exchange Commission (SEC) saw the need to embrace electronic annual report distribution for three reasons. One, we discovered that money spent on printing yearly reports which, in many cases, get to investors late – many months after the AGM has held –  would have been wasted.  So, rather than waste such money, it’s better to distribute yearly reports electronically. The second advantage is technology is taking over the world such that wherever you are in the world, once your email address is known you can receive the audited annual report electronically. So, the money that was being wasted on printing annual reports will now be distributed as part of dividends. Why waste such monies when they can be directed to the shareholders as dividends? We gave the market a year to implement a pilot scheme. That one year ended in June; when it ended SEC conducted an impact assessment to see how it went and at the Capital Market Committee (CMC) it was considered and it was agreed that technology is the way to go. We observed that shareholders have one or two challenges about the issue; one is awareness and the market has agreed that awareness on this will be intensified. Two, we are making greater efforts to ensure that we get the email addresses of  shareholders. Thirdly, we have agreed in addition that there should be enlightenment campaigns. And for those who do not have internet, which is one of the issues that the shareholders raised, it was agreed that physical copies will still be distributed with the electronic versions. We believe that within the next five years, technology will get to remote places.

    We have also enjoined registrars that at AGMs they should take a few minutes to enlighten shareholders on the benefits of electronic annual report.

    What about the Minimum Operating Standards? Was it discussed at the meeting?

    Yes, it was. As part of the Commission’s initiative to enhance the efficiency and effectiveness of capital market operators, a number of initiatives have been taken. About two years ago, the Commission introduced the Risk Based Supervision for Capital Market Operators. In addition to that, we also set up a committee to come up with a Minimum Operating Standards for capital market operators. The Committee has submitted its report and some of the recommendations include manpower and equipment, organisational structure, technology and effective processes. The report was discussed at the CMC and adopted, after which the relevant department in the Commission will work with the leadership of the Trade Groups and implement the recommendations. We have a minimum of two years to implement that. One advantage we have is that the Nigeria Stock Exchange has already implemented the Minimum Operating Standard for stockbrokers. We are going to implement the Minimum Operating Standards for Registrars, fund managers, issuing house, custodians and the rest of them; and we will commence immediately following the adoption of the recommendations of the committee at the Meeting.

    Where are we on forbearance of multiple subscriptions?

    During the banking and insurance sector consolidation between 2004 and 2007, there were a lot of issues in the primary market because the banks or insurance companies came to the market to raise funds and during that period, because a lot of people were coming to the capital market for the first time, they saw the capital market as a place where they can make money, so a lot of them bought shares in different names. Today, those shares are not in the system, because if you are not able to identify yourself properly those shares cannot be properly captured in the system. We are saying come and regularise that situation and get back your shares which are being warehoused somewhere. There is absolutely no punishment attached to it, the SEC is not punishing anybody, we just want such individuals to come and regularise that transaction between now and December 31, 2018. The objective of doing that is that it will increase liquidity in the market because the shares are just there no trading on them, not only that, the investors cannot claim their dividends too and that increases unclaimed dividend. Let them come and regularise so that there will be trading of those shares and they will also claim their dividends.

    Can we know what is delaying crowd funding in this market?

    I want to assure you that the SEC is desirous of having rules on crowd funding. We have discussed it and we want to have crowd funding in this market but we have a challenge. Firstly, the CAMA which is the primary regulation for companies does not have provision for crowd funding and even if it has, Investments and Securities Act (ISA) does not support it. I want to assure you that with the review of ISA that provision is now there and when it is approved we will be able to have it.

    Why is the demutualisation of the Nigeria Stock Exchange taking so long?

    That is going on, as we speak, the bill is with the Presidency, the National Assembly has passed it.

    Has cost of raising funds in the capital market reduced?

    What we did in terms of trying to enhance issuance is to look at the entire value chain holistically and look at the issues that actually impede on issuers coming to the market. One of them was transaction cost. There was a committee that was set up and a study was conducted and it was observed that our market is very expensive in terms of issuance at the primary level and the Commission, in collaboration with other stakeholders, looked at the cost of the issuance. If you are coming to the market, how much will the issuer pay? The rule has provided a limit of 3.17 for equities and 3.97 for Fixed Income. What we did, in conjunction with other stake-holders, is to look at those entire costs and do a haircut. Everybody agreed on how to reduce the cost in other to incentivise issuers to come to our market and that is wat we did. We reduced the cost of equities from 3.17 to 2.21 and, then, for Fixed Income from 3.97 to 2.38. it was a pilot for one year after which we will do an impact assessment to see how it will impact in the market. I can say it has started impacting because issuers are coming and they are happy that these transaction cost has been reduced. It’s a value chain, but it has started giving result. At the end of one year, the Commission will conduct an impact assessment to decide if we can move forward or make amendments.

    Can we get an update on the MTN IPO? If they decided to come to the market, how long will it take to approve it?

    Let MTN file first and the day they inform you they have filed, watch what the SEC will do. Not what is being bandied on the pages of newspapers, we will do our work to the best of our ability. I will make an exception and allow the press to come and monitor. That’s the seriousness with which we view everything that surrounds MTN and other filings. As far as we know, MTN is still a private company and until they convert to a public company and then file application with us, that is when the matter should be focused on us. Another thing you have to consider is documentation.

    The NASD is created for unlisted securities. What are you doing with CAC to ensure that every PLC leverage that platform?

    We have been working with NASD, we have come up with a rule of trading in securities of We have collaborated with CAC on this, we have an arrangement where they open their portals to us and also agreed that companies that have not opened up their shares to the Commission. Secondly, on the issue of unlisted securities, we have an interface with CAC and that essentially is because these Plc. about 17,000, we need to liaise with other regulators to check if their securities are registered with SEC when they bring annual returns. We have also issued a circular and given a deadline of 31st December for all companies that ought to have registered their securities and have not registered. We can decide either to extend it or not. The law provides that they register their securities,

    Recently, FMDQ shareholders approved the removal of OTC from its name, it that of any significance?

    The change of name by FMDQ has not changed what the platform it; it is only a change of name. An OTC is an Over-the-Counter Market where bilateral transactions take place. In the wake of technology and speed, that does not happen anymore. There is a very thin line between trading on an exchange and what you call an OTC. The name change has not changed anything about the functions or nature of the FMDQ as an exchange.

    What are the measures to prevent the market from reacting during the 2019 elections?

    The market must react whether positively or negatively. Irrespective of measures we put in place, the market reacts to activities that happen in the system. In 2008 during the meltdown, the market reacted to the global situation. Therefore, you should be alarmed if something happens during the 2019 election and the market does not react, we should be worried. Irrespective of what we put in place, the market will react. I would rather enjoin gentlemen of the press to help us. The world is now a global village, anything we write here is blown out. I enjoin us to stay on facts, when we do that I am sure it will be fine. I, therefore, appeal to you especially since we are going into an election year to please help us.

    What is the financial literacy timeline?

    We have been working with National Education Research and Development Council (NERDC) on the curriculum. We will soon begin to see traction in Capital Market Studies coming into curriculum of schools.

    On the average, what is the time to market?

    Our desire is to review applications within the shortest possible time and if possible within 48 hours and 72 hours we want to give approval. But there are other factors to consider for instance the documents that is being filed have to be complete, there are other issues we need to look at. If a company is supposed to file six documents and they file three it is not complete filing. It Is those underlying documents that will make you to be able to review the main document and therefore if they are not all filed at the same time they have to be requested to do so. Most times it takes them substantial time to do that.

    When you now open the offer documents and you find a lot of mis statements, a lot of information that is not correct, a lot of information that need to be clarified. You have to ask so that you don’t misleads investors. Those are some of the issues that makes us not to be able to give specific time lines within which an application can be reviewed. We have been working with the various stakeholders and now we are engaging the solicitors as well. We are also doing IT related things within the commission for companies to be able to file electronically, then we review electronically so that it can be fast tracked. We are trying as much to reduce paper work, everyone reviews at the same time electronically so that we close the gap and totally shorten it.

    FinTech is taking over. What is  SEC doing to guide against cross border offerings electronically from impacting negatively?

    We are trying our best to ensure that investors are not hurt.There is no way that we will not encourage innovation, but at the same time you want to be sure that investors are not hurt. We have witnessed two ICO. We have in-house a dedicated FinTech team that watches the environment. Also, we have a sandbox on our website to watch what Fintech is doing. We don’t want Ponzi’s to take over and investors get hurt. Periodically we issue circular and press release advising investors to be careful on investors and securities that have not been listed. Even IOSCO is still studying the issue and yet to come up with a guideline. SEC is actively involved in the working group of IOSCO and very soon IOSCO will come up with a guideline. And with that the SEC will come up with guidelines or rules on that. But we just advise investors to be careful.

    What would you say are the achievements this last quarter?

    I am glad to inform you that the  capital market within the quarter under review witnessed some achievements in various segments of its operations. These achievements validate the continuous efforts of all market participants and are as follows: Aggressive use of various social media platforms to boost financial literacy campaigns such as the creation and deployment of a one minute Financial Literacy video on YouTube; the renovation of five warehouses by the Nigerian Commodities Exchange (NCX) in preparation for commodities trading; conclusion of about 30 cases at the Investment and Securities Tribunal (IST) from a backlog of over 50 cases; commencement of modalities to introduce the Investments and Securities Tribunal Law Reports; implementation of the Recommendations of the Commodities Trading Ecosystem in phases, from 2018 to 2025; and increase in the number of shareholders who have mandated their accounts for E-Dividend payments to 2.55 million.

     

     

  • SEC to regulate technology application in capital market – Uduk

    In its desire to transition towards a technology driven capital market as well as protect investors, the Securities and Exchange Commission, SEC, has said that the Commission would soon come out with regulations that would guide such products in the capital market.

    This was disclosed by the Acting Director General of the SEC, Ms. Mary Uduk during the presentation of a Lecture by Mr. Ade Bajomo, Vice President FinTech Association of Nigeria titled “Market Impact of the FinTech Revolution” in Abuja, Wednesday.

    Uduk who also announced Bajomo as Chair of the Capital Market Committee on Fintech Roadmap for Capital Markets in Nigeria, said the SEC as the apex regulator of the Nigerian Capital market is interested in investments that Nigerians are making especially with the advent of digitalization.

    “If we will regulate this market and understand what is happening we need our staff to understand the rudiments of FinTech. Very soon the whole world will move to technology for regulation. Other jurisdictions have already gone far into it with some of them already amending their rules in that direction.

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    “The International Organization of Securities Commissions (IOSCO) is on it and there is a lot on it already all over the world and we can’t be left behind. We are very much interested in some of the most active areas of Fintech innovation like block chain technology, crypto currencies and how they affect investors” she said.

    She stated that as regulators of the capital market, it is the responsibility of the SEC to find out how such investments are going on and if they meet set standards because when investors lose money they will come back to the SEC adding “That is why we are seeking to understand what FinTech is all about to enable us regulate the market properly. recalled that during the last Capital Market Committee meeting in Lagos, the Committee agreed to set CMC to set up a Committee to draw a Fintech Adoption roadmap for the Capital Market.

    The SEC Boss alluded to the growing influence of Fintechs as she stated the need for the Capital Market to take advantage of the Fintech offerings in moving the Capital Market forward. She equally emphasized the focus of the Commission on capacity building, knowledge sharing, advocacy and collaboration with relevant entities.

    According to her, “the Capital Market needs to create an enabling environment that is attractive enough for Fintechs to innovate as the Market should engage actively with the new trend in technology and provide the adequate regulatory framework for proper adoption of suitable technology and that is one of the reasons why we have invited FinTech here today for this presentation”