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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

SEC Calls For Use of Technology to Deepen Financial Inclusion

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The Securities and Exchange Commission (SEC) called on policymakers and capital market stakeholders to leverage technology to increase access to financial services and deepen financial inclusion in the country. 

The Director-General of the SEC, Lamido Yuguda made these comments at the 2021 Capital Market Correspondents Association of Nigeria workshop which was held in Lagos during the weekend.

He said there were over 191 million active mobile subscribers and 140 million active data subscribers in Nigeria as of the 3rd of October 2021 and that presented a cost-effective means of providing financial services to the untapped market, especially in the rural areas.

His full statement was “Leveraging technology to offer financial services has advantages over traditional means because it breaks down geographical constraints, It also simplifies the means of serving existing customers, for example through the use of mobile banking agents to perform banking transactions”.

Financial institutions in Nigeria are increasingly using electronic channels to onboard clients and address customer queries and bring financial product offerings to prospective users.

When he was asked what steps the SEC is taking to boost financial inclusion, he said the SEC has taken steps such as working with the Fund Managers Association of Nigeria to accelerate financial inclusion to collective investment schemes.

The SEC is also proposing a hackathon challenge to help develop a comprehensive suite of mobile internet-based services targeted at having an end-to-end process of the entire capital market.

The Deputy Director, Securities offerings at SEC, Abdulkadir Abbas also spoke during the event and said there was a need for active collaboration of all capital market shareholders to help drive the initiative. He said the adoption of technology can help open up the capital market and bridge the gap of the unbanked. He also said the average age of participants in the capital market is 53 years and that youths need to be motivated to come and trade on the capital market.

 

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Capital Market

ABC Transport Plc Plans to Raise N1.27 Billion Via Rights Issue

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ABC Transport Plc

ABC Transport Plc, a Nigerian leading transport company, has proposed to raise an additional N1,127,236,000 via way of a rights issue, the company disclosed a statement filed with the Nigerian Exchange Limited.

ABC Transport through its Stockbroker, FSL Securities Limited, has submitted an application to the Nigerian Exchange Limited for approval and listing of One Billion, One Hundred and TwentySeven Million, Two Hundred and Thirty-Six Thousand (1,127,236,000) Ordinary Shares of Fifty Kobo (N0.50) each at Thirty-Five Kobo (N0.35) per share, on the basis of sixty-eight (68) new ordinary shares for every one hundred (100) ordinary shares held.

The qualification date for the rights issue was Tuesday, 30 November 2021.

What is Rights Issue

A Rights Issue or Rights Offer is a privilege given to existing shareholders of a company to buy additional shares in the company.

It is an invitation to existing shareholders to purchase additional new shares in the company. This type of issue gives existing shareholders securities called rights. With the rights, the shareholder can purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price.

Key Takways

  • A rights issue is one way for a cash-strapped company to raise capital often to pay down debt.
  • Shareholders can buy new shares at a discount for a certain period.
  • With a rights issue, because more shares are issued to the market, the stock price is diluted and will likely go down.

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Capital Market

Steps On How To Buy MTN Share Offer

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MTN

Following the announcement of MTN Nigeria Communication Plc that it was selling an additional 575 million shares at N169 per share, many investors have been asking questions on how to own a piece of the telecommunications giant before it closes on Tuesday, 14 December 2021.

Before we proceed, it is important to note that MTN has pegged the minimum subscription per transaction at 20 shares and subsequent multiples of 20, 40, 60, etc. The share offer was attached with a buy 20 shares and get 1 share free, however, an investor is subject to a maximum of 250 bonus shares. Meaning, an investor is only entitled to a bonus on the first 5,000 shares bought.

The incentive is open to retail investors who buy and hold the shares for at least 12 months.

Below is a step-by-step process on how to buy and own a piece of MTN Nigeria, the second most capitalised listed company in Africa’s largest economy.

How to Buy MTN Shares?

There are various channels to purchase MTN shares. Interested investors can either buy through MTN or from several approved stockbrokers, some of them are listed below.

To Buy Directly from MTN Nigeria

Interested investors should use the approved channels listed below to submit an application. You can find full details of how to submit an application at www.mtnonline.com/PO or consult with your stockbroker or banker for further guidance.

Application for MTN share Offer can also be submitted at MTN stores. The MTN MoMo agents have been trained to assist customers and provide guidance on using PrimaryOffer to submit an application.

To Buy Through the Nigerian Exchange Group (NGX)

Apply for your shares digitally through the PrimaryOffer app by NGX. Visit the PrimaryOffer website www.primaryofferng.com by NGX; or Download the PrimaryOffer app by NGX from the App Store for IOS and Google Play store for Android devices. Note that a BVN, CHN and CSCS Number is required to register and submit an application on the PrimaryOffer portal.

If your application is successfully submitted through PrimaryOffer, you will receive a confirmation email.

PrimaryOffer Application Process

  • Download the app from the app store
  • Click “Create an Account”
  • Input your BVN
  • Input your date of birth linked to your BVN
  • Click “Proceed”
  • Validate your information
  • Create password
  • Click “Submit”
  • An OTP is sent to your email for verification
  • Upon verification, log in with your email and password
  • Select “MTN Offer”
  • View details of the Offer – including the Pricing Supplement
  • Input number of shares you want to apply for
  • Input CSCS, CHN and Bank details for verification.

Alternatively, a CSCS and CHN will be created for you if you don’t” have a CSCS account.

  • Input your bank account details and re-insert your login password for verification
  • Read and accept the terms and conditions
  • Proceed to Make Payment
  • You will receive a notification of the successful submission in your email

To make payment on the PrimaryOffer portal, select one of the options available on the payment page, you can Pay with Card, USSD Code, Bank, Bank transfer, MVisa-QR Code, Barter, PayAttitutde, or with Paga.

If debited but payment status shows pending, forward your proof of payment to info@primaryofferng.com for further review.

Buying MTN Share Via Receiving Agents

Apply for your shares through authorized Receiving Agents – Issuing Houses, Stockbrokers & Banks (applications can be completed and submitted, and payments processed at bank branches nationwide).

  • An interested investor should complete an Application Form.
  • Submit the completed Application Form and make payment to a Receiving Agent.
  • Receiving Agent confirms receipt of payment for the number of shares applied for.
  • Receiving Agent issues an acknowledgment copy of the Application Form.
  • Receiving Agent submits the application on PrimaryOffer.
  • Applicant receives a notification from PrimaryOffer once the application is submitted by the Receiving Agent.

If you submit an application through a Receiving Agent, the Receiving Agent will provide you with a photocopy of the completed Application Form bearing the date and time stamp. This should be kept for record and tracking purposes.

After SEC’s clearance of the allotment, the shares allotted to you will be credited into your CSCS account and you will receive an automated SMS from CSCS notifying you of the credit.

What is a Clearing House Number (CHN)?

Clearing House Number (CHN) is a unique number that identifies each investor in the Nigerian Capital Market. The CHN is alphanumeric and starts with a “C”. Accordingly, your CHN details must be provided in the “CHN Number Details” section of your application.

What is a CSCS Account?

The CSCS (Central Securities Clearing System) is a computerised depository system responsible for clearing, storing, and settlement of securities transactions in the Nigerian Capital Market. A CSCS account number is created for you by your stockbroker and can be used for buying and selling securities. Accordingly, your CSCS details must be provided in the “CSCS Account Details” section of your application.

MTN Share Offer Eligibility

Anyone above 18 years of age is eligible to buy the MTN shares on offer, but there are a limited number of conditions.

  • Applicants must apply for a minimum of 20 shares and multiples of 20 shares thereafter.
  • Applicants must have a valid BVN to register and submit an application on PrimaryOffer.
  • Applicants must have a CHN and CSCS account.

Nigerians abroad who are interested in MTN share offer can also apply with their BVN details, also shares can be bought for another person if the beneficiary’s particulars, including BVN, CHN and CSCS account details are available. The beneficiary’s bank account details must be filled in for future e-payments, including dividends.

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