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SEC Proposes New Rule For Public Companies and Capital Market Operators

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The Securities and Exchange Commission (SEC) has proposed new rules for public companies and capital market operators to disclose penalties and sanctions imposed on them in their audited financial statements.

The commission stated this in a document titled, “Exposure of proposed new rule and sundry amendments to the rules and regulations of the commission,” posted on its website on Monday.

The new rule stated that “Public companies and capital market operators shall disclose penalties and sanctions in their subsequent Annual reports byways of notes to the account until all penalties owed the commission ae fully paid and sanctions fully complied with”. 

The amendments pegged the registration fee of brokers/dealers to N5 million against the N500,000 currently applicable.

Also, the broker/dealer is expected to pay N100,000 each as processing fees and registration of sponsored individuals in the new rule.

The fee for Sub-brokers (digital) was increased to N1 million from N200,000; sub-brokers (corporate) to N1 million from N200,000 and inter-dealer brokers to N5 million from the current N500,000.

“All CIS fund managers shall pay annual supervisory fees of 0.2 percent of the net asset value of the CIS under management not later than January 31 of every year to the commission,” SEC said.

It added that for failure to comply with the guideline, the fund manager shall be liable to a penalty of N100,000 and a further sum of N5,000 for every day of default.

“They shall continue to report outstanding penalties and sanctions in their subsequent annual reports by way of notes to the accounts until all penalties owed the Commission are fully paid and sanctions fully complied with.

“The commission shall publish on all public channels, including the SEC website or any other medium, the list of public companies and capital market operators with unresolved regulatory issues,” SEC added.

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Capital Market

AELP Link to Boost Trading Between NGX and Other African Exchanges

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Cross-border trading from one African securities exchange to another comes a step closer today after the African Securities Exchanges Association (ASEA) signed a contract to procure an order-routing system. Seven of Africa’s leading securities Exchanges are working together in the African Exchanges Linkage Project (AELP) to boost pan-African investment flows and bring more liquidity to African markets.

The contract is for the design and rollout of the AELP Link technology platform for routing orders and trade confirmations between stockbrokers on the seven Exchanges participating in the pilot phase of the AELP. The Supplier is DirectFN, a global IT firm experienced in capital markets solutions across the Middle East and many emerging and frontier markets, which was awarded the contract after a competitive bidding process that attracted applications from top international suppliers in 18 countries.

The AELP is a joint initiative by ASEA and the African Development Bank (AfDB) aimed at unlocking Pan-African investment flows, promoting innovations that support diversification for investors, and addressing depth and liquidity in the markets. It is funded by a grant from the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund managed by the African Development Bank.

Speaking on the development, Mr. Temi Popoola, Chief Executive Officer, Nigerian Exchange (NGX) Limited, said: “At NGX, we are optimistic that today’s milestone will further hasten efforts at capital market integration across Africa. The work of the AELP is significant, as it will serve to ultimately boost Pan-African investment flows, promote innovations that support the diversification needs of investors in Africa, and help address the lack of depth and liquidity in Africa’s financial markets. We, therefore, take this opportunity to commend the efforts of ASEA and AfDB, and reiterate our continuing support of the AELP.”

With the AELP Link, investor orders in one market will be channeled by a domestic stockbroker to a stockbroker on the foreign market where the security is listed, to enter into that market for execution in the foreign market. African Listed Securities to be accessed through the AELP Link include all securities that are available for cross-border investors.

Equity investments available include Africa’s most promising and profitable businesses as well as some global leaders among more than 1,050 companies listed. Investors will also buy or sell corporate and government bonds, Exchange Traded Funds (ETFs), and derivatives where these are listed on the participating exchanges and the sponsoring stockbroker provides access.

Commenting, Dr. Felix Edoh Kossi Amenounvé, President of ASEA and CEO of the BRVM, said: “We are excited with this big step towards free movement of investments across Africa and free flow of capital. Our aim is to open new opportunities for individual and institutional investors to invest productively into Africa’s growth story. The Exchanges continue to support African enterprises and governments to raise long-term capital for African jobs, business growth, infrastructure, and development.”

Dr. Walid Al Ballaa, the Managing Director, of DirectFN, said: “With innovative technology and focus to bring digital maturity in building digital relationships through the AELP-Link technology platform establishment, DirectFN feels equally excited to assist practically in realizing the goals across the participating African Exchanges and to enable the African capital market ecosystem digitally to create a positive impact on the overall economy.”

The AELP exchanges are Nigerian Exchange (NGX), Casablanca Stock Exchange, The Egyptian Exchange, Johannesburg Stock Exchange, Nairobi Securities Exchange, Stock Exchange of Mauritius and Bourse Régionale des Valeurs Mobilières (stock exchange for the West African Economic and Monetary Union’s eight West African countries).

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Seplat kicks off Capital Markets Day with NGX Closing Gong Ceremony

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Nigerian Exchange (NGX) Limited hosted Seplat Energy to a digital Closing Gong ceremony to commemorate the first dual Capital Markets Day between Lagos and London on Thursday, 29 July 2021. The event marks an important milestone for Seplat marking its name change from Seplat Petroleum Development Company to Seplat Energy.

Speaking at the event, the Chief Executive Officer, NGX, Mr. Temi Popoola, CFA, commented: “We are delighted to host the Management Team of Seplat Energy led by the Chief Executive Officer, Mr. Roger Thompson Brown. Over the last decade, Seplat has established itself as a leading independent Nigerian energy company completing the first-ever dual listing on the Premium Board of NGX and Main Market of the London Stock Exchange (LSE), an arrangement facilitated by the capital markets agreement between NGX and LSE. In 2014, Seplat raised tier one capital via the Initial Public Offering of US$535Mn, ranking as the largest ever capital raise for a Nigerian company since 2008, and the second-largest ever for a Nigerian company. Certainly, NGX is proud to have been a trusted business partner to Seplat Energy over the years, and we assure its leadership of our support in achieving its strategic objectives.”

On his part, Mr. Brown stated, “This is indeed an exciting day for us and we are delighted to be speaking from the stage of the LSE. Given the delightful partnership we have with NGX beginning in the early days of getting ready for listing, and what was noteworthy was the way NGX linked up with LSE to permit the first-ever dual listed company with full fungibility of trading between Lagos and London. This collaboration has gone from strength to strength and it is therefore fitting that NGX opens this Capital Market Day. For us at Seplat, we see the critical need for energy transitions in Nigeria and we are here as the indigenous, independent energy with proud roots in Nigeria and the global reach that allows us to access the capital to fund these transitions.”

Following remarks from the Doyen of the capital market, Alhaji Rasheed Yusuff, Mr. Brown sounded the virtual closing gong to the applause of NGX and Seplat Executives, as well as capital market stakeholders officially kicking off its Capital Markets Day.

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FBNQuest Series 19 Commercial Paper Listed on FMDQ Securities Exchange Limited Platform

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FBNQuest, the investment banking and asset management business of FBN Holdings Plc, has announced the listing and acceptance of the FBNQuest Merchant Bank Series 19 Commercial Paper (CP) on the FMDQ Securities Exchange Limited platform. 

FBNQuest Merchant Bank acted as the Arranger, Dealer and Sponsor of the transaction. The issue was approved by the FMDQ Securities Exchange Limited and has been listed on its platform.

The offer was launched in June. The Series 19 CP, which is part of the bank’s N100 billion CP Program, will help the organisation meet its short-term liquidity needs and grant them access to alternative and cheaper source of funding.

The transaction adds to the organisation’s impressive portfolio and highlights its capabilities in the successful execution of sizeable capital market and commercial debt transactions. Speaking on the transaction Oluseun Olatidoye, Head Capital Markets, FBNQuest Merchant Bank, stated, “We are pleased to announce the listing and acceptance of the FBNQuest Merchant Bank Series 19 Commercial Paper on the FMDQ Securities Exchange Limited’s Platform.  The admission of the CP Offering on FMDQ’s platform reflects the potential and growth of the Nigerian Debt Capital market”.

He further stated that “The success recorded on this transaction also attests to the degree of confidence investors have in the business”.

As a full service investment bank, FBNQuest has advised on the issuance of several Bonds and Commercial Papers for organisations such as Interswitch; Mixta Real Estate plc, Dangote Cement Plc, Nigerian Breweries Plc (NB), Lafarge Africa Plc, Flour Mills of Nigeria Plc (FMN), Wema Bank Plc, and UACN Property Development Company Plc (UPDC) to mention a few.

The organisation, through its Leading Conversations with FBNQuest webinar series, recommended commercial papers and bonds to corporate issuers seeking to raise working capital, expand capital, refinance expensive debt and better match their cash obligations with revenues. The webinar was themed ‘Funding through Commercial Papers and Bonds’ and was designed to engage corporates and investors on the opportunities within issuing and investing in commercial papers and bonds.

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