The apex regulator of the nation’s capital market, in a proactive move to further deepen the capital market amidst the challenging economy situation of the country, has constituted sub-committees to look into various prevailing issues bedeviling the progress and development of the market.
Addressing journalist on the outcome of deliberations at the first Capital Market Committee (CMC) meeting chaired by the Acting Director-General of the Securities & Exchange Commission (SEC), Ms. Mary Uduk, and comprising chief executives of licenced capital market operators, stakeholders were assured of positive changes soon.
Expressing worry over the frequent rate companies voluntarily de-list their shares from the Nigerian Stock Exchange (NSE), Ms. Mary Uduk, who was recently appointed the Acting DG of the Commission, explained that the CMC has set up a sub-committee, comprising representatives of the various stakeholder groups, to brainstorm on how to stem the tide and rather attract more firms for listing, by interfacing with firms, while reviewing circumstances that lead to frequent voluntary delisting.
“Delisting poses a threat to the growth and development of the market in view of the fact that quite a number of them are highly capitalized companies. We are expecting the committee on listings would come up with strategies to attract new listings.”
The committee is also expected to meet management of companies that ought to be listed to find out why they are not coming forward and then encourage them to do so, putting forward the advantages of listing their company shares, even as she noted that some have raised issues of tax. Recommendations on the way forward are to be made by the committee.
Uduk explained further that the commission was also liaising with the Corporate Affairs Commission (CAC) to compile a record of companies not listed on either the NSE or the NASD, the secondary market for Over-The-Counter trading of all securities of unquoted public companies in the country, noting that the move would also expose those qualified to be public companies but have not registered their securities with the SEC.
“We have been waiting for them; we have a rule that says trading in shares of public companies has to be through a SEC approved trading platform. We have been working with the NASD and registrars to enforce compliance. We have also made it a rule that any trading outside a SEC approved platform is illegal,” she added, while acknowledging the fact that the number of companies with their shares traded on the NASD platform have increased tremendously in both volume and value.
On electronic mandates, the Acting DG noted that the CMC has restated commitment on success of the Capital Market Master Plan and the electronic dividend (e-Dividend), just as the Technical Committee on E-dividend registration put total approved mandates currently at about 2.5m, translating into 466,000 unique investor accounts.
She emphasized that the deadline for the free e-dividend registration was 31 March 2018 and that has not changed, explaining that the new direction of the industry was that bank managers along with registrars will charge a token sum of N150 per mandate.
The commission therefore solicited the cooperation of stakeholders in its “data collection efforts on impact evaluation of the electronic dividend mandate System (e-DMMS), corporate governance and capital flows and ownership structure. The outcome of these studies will be made public.”
The commission however explained that the N150 which is debited from the account holder is shared equally by parties to the process: the bank, registrar and the Nigeria Inter Bank Settlement System (NIBSS).
Ms. Uduk also explained that the CMC has set up a sub-committee on the possibility of the electronic Initial Public Offering (e-IPO) and submit a report in three weeks, while It was noted that various stakeholders within the market, such as the NSE, Capital Market Registrars and the Association of Issuing Houses of Nigeria (AIHN), have deliberated on the e-IPO in the past.
‘The new committee is therefore expected to harmonise the various reports and create rules for e-IPO, taking into account existing SEC rules,” she said.
Speaking on efforts to intimate the younger generation on the nation’s capital market, the Acting DG said various trade groups made commitments at the meeting to support the Commission as it works “with National Educational Research and Development Council (NERDC) to institute a stand-alone capital market curriculum for basic and senior secondary education in Nigeria.”
On the mandate of the Commission to protect investors’ fund, the regulatory body called on Nigerians to exercise extreme caution on the use of “Crypto currency” as a vehicle of investments in the country.
Ms Uduk also stated that apart from SEC Nigeria, other regulatory agencies in the country, have also not approved any financial service in the country around crypto currency, therefore, advising investors to be wary of such scheme.