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Published On: Sun, Apr 22nd, 2018

SEC expresses worry over spate of delisting companies

Mary Uduk, acting Director-General, SEC

FELIX OLOYEDE

The spate of highly capitalised companies delisting from the Nigerian Stock Exchange (NSE) calls for some concern, the Securities and Exchange Commission (SEC) has stated.

The Acting Director General, Ms. Mary Uduk, while briefing pressmen on the outcome of the first Capital Market Committee (CMC) in 2018 on Friday, noted that this trend poses threat to the growth and development of the market.

She also revealed that a committee has been setup to companies were hesitant to list on the exchange.

“During the meeting, the issue of increase in delistings by public companies was highlighted. This 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,” she explained.

The Technical Committee on Electronic-dividend registration reported that the total approved mandates currently stood at about 2.5 million translating into 466,000 unique investor accounts, Uduk also disclosed.

She reiterated that the deadline for the free E-dividend registration was March 31, 2018 and that has not changed.

“The new direction of the industry is that bank managers along with registrars will charge a token sum of N150 per mandate,” she explained.

According to her, the Central Securities Clearing System (CSCS) noted that out of 5.1 million accounts with only 1,191 have Direct Cash Settlement (DCS) subscriptions and only 15 out of 18 settlement banks have contributed to the DCS initiative.

“Considering the fact that DCS will instill confidence in the market, there is the need for all parties involved in the process to work harder to achieve a 100 per cent migration,” she said.

She also warned investors on danger in participating in crypto currencies as a vehicle of investments.

In her word, “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 Nigeria.”

Speaking further, she said, “The Commission solicited the cooperation of stakeholders in our 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.”

“On multiple subscriptions and forbearance for shareholders with multiple accounts, the forbearance window has now been extended to September 2018. Registrars have acknowledged that investors have started coming forward but there are challenges in the process.

“The CMC deliberated and recommended the appropriate Technical Committee to 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.”

She noted that the distribution of electronic annual accounts of public companies has commenced.

“However, we also received feedback on concerns from some Shareholders Associations. The market will deliberate further on the matter while the pilot period of one year would be allowed to go on.

“The Commission is working with National Educational Research and Development Council (NERDC) to institute a stand-alone capital market curriculum for basic and senior secondary education in Nigeria. To this end, Trade Groups made commitments at the meeting to support this initiative.

“The Technical Committee on Non-Interest capital market reported that the first sovereign sukuk was issued in 2017 and about 1,600 retail investors invested N5 billion on the instrument. The next level of engagements is to work with supra-national entities (such as IFC, AfDB), state governments, institutions (such as Federal Mortgage Bank, NMRC) to include sukuk options in their capital investment plans.

“Globally, capital markets are moving towards Electronic IPOs (e-IPO) and the Nigerian Capital Market is working to adopt this trend.”

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