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SEC Holds Second Capital Market Committee Meeting In 2021

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Nigeria SEC- Investors king

The Securities and Exchange Commission (SEC) is set to hold the Second Capital Market Committee (CMC) meeting for the year from Thursday, August 12 to Friday 13, 2021.

The meeting is scheduled to hold virtually through Zoom with key stakeholders in the capital market meeting on August 12, while the usual interface with the press, on the outcome of the CMC meeting, will take place on Friday, August 13.

According to the SEC, “Attendance to both events is strictly by invitation. Invited participants will be sent unique links with which to join the meeting”.

The CMC was primarily established to serve as a medium for the exchange of ideas among market stakeholders as well as an avenue for providing feedback to the SEC on how to continuously address challenges, improve market operations and enhance the regulatory framework. It is an industry-wide committee comprising members of the SEC, representatives of capital market operators and trade groups and other stakeholders. The CMC meets every quarter.

During the meeting, issues bordering on implementation of the Ten Year Capital Market Master Plan, implementation of the Fintech Roadmap, the commodities trading ecosystem roadmap as well as other salient matters relating to the capital market and the economy would be discussed.

Recall that the Commission had unveiled the ten-year Capital Market Master Plan (CMMP) in November 2014 and has continued to implement the initiatives, which are designed to reposition the Nigerian Capital Market as an attractive investment destination and a critical facilitator of capital formation for the accelerated growth and development of the Nigerian economy.

Some of the CMMP initiatives that have been implemented include; Direct Cash Settlement, regularisation of multiple subscriptions, dematerialization of share certificates, and the introduction of the e-Dividend Management System. The CMMP initiatives have helped in promoting transparency, protecting investors and enhancing market confidence.

The objectives of the CMMP are also in consonance with the Federal Government’s economic strategy, focused on encouraging a private sector-led economy to drive inclusive growth.

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Capital Market

NGX Group Nets N1.84b as Employees Get Incentives

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Nigerian Exchange Group- Investors King

Nigerian Exchange Group (NGX Group) Plc recorded a net surplus after tax of N1.84 billion in 2020 as shareholders approved incentive and reward plans for employees of the company.

At the 60th annual general meeting (AGM) of the NGX Group yesterday in Abuja, the first AGM after the demutualisation of the defunct Nigerian Stock Exchange (NSE) to NGX Group, shareholders voted in support of major resolutions.

Shareholders approved proposals to introduce equity-based incentives to employees’ remuneration, including an Employee Share Ownership Plan and a Long-Term Incentive Plan, aligning the interests of internal stakeholders with those of shareholders in long term value creation.

The audited report and accounts of NGX Group for the year ended December 31, 2020 showed gross income of N6.02 billion and surplus after tax of N1.84 billion. Net asset grew by 10 per cent to N31.28 billion.

Group Chairman, Nigerian Exchange Group (NGX Group) Plc, Otunba Abimbola Ogunbanjo said the NGX Group has remained resilient as it continues to demonstrate consistent growth after over six decades.

“Despite the global pandemic and other economic shocks, it is indeed noteworthy that we have already begun to actualise the benefits of demutualisation including the alignment of stakeholders’ interests in the value created by the new group under a revised corporate governance framework,” Ogunbanjo said.

He said the approval of the new equity-based incentive schemes for employees were in line with the authority granted to directors by then members of NSE at an extraordinary general meeting conducted in March 2020 and in line with global best practices allowing the group to attract and retain the best talent.

“Today, I am more confident than ever that the group is well-positioned to deliver value to shareholders as we move into a new growth phase,” Ogunbanjo said.

Group Managing Director, Nigerian Exchange Group (NGX Group) Plc, Mr. Oscar Onyema said the 2020 results reflected the challenging macroeconomic and market conditions as well as operational resilience of the group.

According to him, in the context of COVID-19 pandemic, the group maintained tight cost controls, which reduced expenses by 13 per cent despite investments in technology that allowed it to operate remotely with zero downtime.

He added that NGX Group and its wholly owned subsidiaries – Nigerian Exchange Limited, NGX Regulation, and NGX Real Estate – continue to advance the realisation of its vision to be Africa’s leading integrated capital market infrastructure provider.

“As the group progresses its plans to list on Nigerian Exchange, we look forward to welcoming a broader group of investors to share in our journey,” Onyema said.

In addition to the re-election of the Non-Executive Directors who were retiring by rotation and the election of the members of the Audit Committee, shareholders also approved the proposed remuneration for the Board and non-executive members of the erstwhile National Council of the NSE.

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Capital Market

Access Bank Announces 5-Year Senior Unsecured Note Issuance

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Access Bank Plc, Nigeria’s leading bank on September 9, 2021, gave a hint that it will issue a 5-year fixed-rate USD-denominated regulation S/144A Senior Unsecured Note under its Global Medium Term Note Programme subject to market condition.

A notice by the bank at the Nigerian Exchange Ltd signed by Sunday Ekwochi, Company Secretary did not indicate the volume of funds intended to raise.

However, the bank said that it had mandated Absa, Barclays, JP Morgan and Standard Chartered Bank as Joint Bookrunners and Chapel Hill Denham and Rand Merchant Bank as Financial Advisers and Joint Bookrunners to arrange a global investor call in addition to a series of fixed income investor call commencing on September 11, 2021.

Access Bank Plc under its US$1 billion Global Medium Term Note Programme with the Base Prospectus of 23 September 2016 may from time to time issue senior notes and subordinated notes denominated in any currency agreed between the Issuer and the relevant Dealer, subject to compliance with all applicable legal and/or regulatory and/or central bank requirements.

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SEC Plans To Reduce Cost, Targets Profitability In 2 Years

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Securities and Exchange Commission

The Securities and Exchange Commission (SEC) has unveiled plans to reduce its operating costs in order to boost profitability within the next two years.

The Director-General of SEC, Mr. Lamido Yuguda, said this in a statement made available to the News Agency of Nigeria in Lagos.

Yuguda said the commission had been paying 25 percent of gross revenues into the coffers of the government. He said that the total revenue paid so far by SEC into the treasury as of the end of June 2021 was about N1.5 billion.

Yuguda noted that the commission had been operating under very difficult circumstances occasioned by the coronavirus pandemic.

He explained that the commission was currently superintending over a market affected by the negative impact of the coronavirus pandemic.

The director-general said that steps were being taken to reverse the fortunes of the apex regulator of the capital market.

“If we go through the Medium-Term Expenditure Framework (MTEF) which we started last year, if we look at 2022 and 2023, you will see that we have worked on our expenditure so that by 2023, the deficit will actually turn into a surplus of N1.24 billion and by 2024 we should have N2.5 billion surplus.

“We, therefore, need the support of all to engineer the kind of transition we are thinking of at the SEC and that 30 percent which is taking most of the staff cost is part of the set we are targeting for the early retirement programme.

“There is a lot of interest within the commission to do it but we are really short of the funds to do it now.

“We have done a lot of revenue rising drives just to ensure that the commission stays on track.

“This is something we are mindful of and we have the intent and capacity to deliver on this.”

On the high overhead costs, Yuguda explained that this was being reduced aggressively.

“It has reduced because we have since we came, aggressively looked at the overhead and staff cost and reduced certain components of our staff pay that has generated over N2 billion of savings as at now.

“If you take the MTEF numbers, as you go forward, you find that by 2024 staff cost reduces to only N5.88 billion. So that is the trajectory that we are working on,” he said.

Yuguda said that SEC had approached a number of institutions including the African Development Bank, Financial Sector Development Africa and a number of other donors to shore up resources.

This, he said, was expected to fetch a grant figure of N3.84 billion, adding that more grant was being expected in the near term to boost operations.

He added: “The truth of the matter is that not only for the sake of cutting down on the cost of the SEC when we came last year, but we also discovered there has been no IT investment in the SEC for over a decade.

“So, our IT infrastructure is now obsolete so we have to renew that.

“And given this difficulty, we could only do that by going out and looking for grant, and thankfully we have gotten very positive feedback. But this grant is only going to address investment in IT infrastructure.

“We are working hard to ensure we deliver, from 2023 the tide will begin to change and that is because of the massive efforts that we have made both on the revenue front and on the cost front.”

The News Agency of Nigeria reports that the Senate on Sept. 2, 2021, raised the alarm that the nation’s capital market regulator, SEC, was going bankrupt.

The lawmakers made the observation when Yuguda, made a presentation before the Senate Joint Committees on the 2022-2024 MTEF and Fiscal Strategy.

Senator representing Lagos West and Chairman Senate Committee on Fice, Mr Solomon Adeola, the Chairman of the Senate Joint Committee was the first to raise observation on the personnel cost.

They slammed the commission for recording N9 billion deficits in the past three years.

As contained in the document submitted by the director-general, SEC recorded a N2.9 billion deficit in 2019; N4.3 billion in 2020 and N1.7 billion as of June 2021.

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