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SEC Unveils Plans To Adopt E-IPO In Nigeria’s Capital Market

The Securities and Exchange Commission (SEC) Nigeria on Friday disclosed that plans were ongoing to ensure that companies seeking to raise funds through Initial Public Offering (IPO) in the capital market make such offering electronically in line with emerging trends globally.

Already, a committee had been set up to consider the procedures and modalities the process would entail and forward its recommendations for consideration by the regulatory authorities. To be adopted, the authorities will issue the required regulatory and operational guidelines.

The e-IPO allows registered persons or stock broking firms to use electronic platform to collect applications from their clients or the public for securities in an initial public offering.

Giving this hint while briefing the media on the key issues discussed at the end of the SEC’s CMC meeting held Thursday in Lagos, the Acting Director General of the Commission, Mary Uduk, listed members of the committee to include the Securities and Exchange Commission (SEC), Nigeria Stock Exchange (NSE), and Association of Issuing Houses of Nigeria (AIHN).

Others are, Association of Stock Brokers (ASHON), Central Securities and Clearing System (CSCS), Institute of Capital Market Registrars (ICMR), Capital Market Solicitor Association (CMSA), Fund Managers Association of Nigeria (FMAN), and the Nigeria Inter-Bank Settlement System (NIBSS).

Uduk, who spoke on sundry issues considered at the meeting to grow the capital market and ensure its operations meet global best practice standards, also disclosed that  Commission was working with National Educational Research and Development Council (NERDC) to institute a stand-alone capital market curriculum for basic and senior secondary education in the country.

In addition, the investment expert explained that CMC deliberated on the issue of multiple subscriptions and forbearance for shareholders with multiple accounts of which the forbearance has now been extended to September 2018, and recommended that the appropriate Technical Committee should seek input and come up with recommendations to address the challenges.

Therefore, we encourage all affected investors to come forward and take advantage of the window before the new deadline.

On the low rate Direct Cash Settlement (DCS) subscription which the CSCS noted that out of 5.1 million accounts with them only 1,191 have Direct Cash Settlement (DCS) subscriptions and only 15 out of 18 settlement banks have contributed to the DCS initiative, Uduk noted that in view of fact that DCS will instill confidence in the market, there was the need for all parties involved in the process to work harder to achieve a 100% migration.

The Acting DG also restated the Commission’s position on cryptocurrencies trading in the country, warning the public to exercise extreme caution in respect of the virtual currencies as a vehicle for investments.

She said: “As part of our investor protection mandate, the Commission wishes to alert the public to exercise extreme caution with regards to crypto currencies as a vehicle of investments, especially as none of the persons, companies or entities promoting cryptocurrencies has been recognized or authorized by SEC or by other regulatory agencies in Nigeria to receive deposit from the public or to provide any investment or other financial service within or outside.”

This is even as she expressed the Commission’s appeal for 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, adding that the outcome of these studies will be made public soon.

On SEC’s readiness to partner the media in the task of growing the capital market, Uduk assured that the “Commission will continue to seek the support of the media and continuous collaboration in order to develop the capital market to the benefit of investors and the nation at large.”

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