Multiple Shares Subscriptions: SEC Okays New Deadline

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BY CHINYERE OBIORA, LAGOS – Securities and Exchange Commission (SEC) has extended the forbearance deadline to September 2018 ending for those engaged in multiple subscriptions to shares issues by public companies. 

The forbearance relates to investors, who subscribed to public offers, using different names to acquire shares much more than allowed per person.

Speaking on the outcome of the Capital Market Committee (CMC) meeting, Acting Director General of SEC, Ms Mary Uduk said the extension was to enable more investors take advantage of the new window.

She said the body of capital market registrars “acknowledged that investors have started coming forward, but there are challenges in the process.” 

The SEC boss urged affected investors to embrace and take advantage of this window to consolidate their account before the new deadline, noting that the Capital Market Committee CMC has deliberated and recommended the appropriate Technical Committee to seek input and proffer recommendations to address the challenges.

Uduk also said the Technical Committee on Non-Interest capital market has reported that the first sovereign Sukuk Bond issued last year was successful,  adding that  about 1,600 retail investors invested N5 billion on the instrument. 

She, however, said 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.

The Acting Director General also said the increase in de-listings of shares from Nigerian Stock Exchange (NSE) by public companies is becoming worrisome, stressing that the development poses a threat to the growth and development of the market because quite a number of them are highly capitalized companies.

Uduk further stated that the committee on listings is expected to come up with strategies to attract new listings, adding that the total approved e-dividend registration mandates is currently standing at 2.5 million, translating into 466,000 unique investor accounts.

According to her, the deadline for the free e-dividend mandate expired on March 31, 2018 but  the registration for e-dividend is on-going, just as she warned that investors who have not registered would now pay a token  service charge of N150 per mandate.

“Globally, capital markets are moving towards Electronic IPOs (e-IPO) and the Nigerian Capital Market is working to adopt this trend”, Uduk said, adding that a committee comprising the Securities and Exchange Commission (SEC), Nigeria Stock Exchange (NSE), Association of Issuing Houses of Nigeria (AIHN), 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 NIBSS has been instituted by the CMC meeting to consider how e-IPOs will be adopted in the nation’s Capital Market. 

On the Direct Cash Settlement (DCS), Uduk said of the 5.1 million accounts with CSCS, only 1,191 have DCS subscriptions, adding that 15 out of 18 settlement banks have contributed to the DCS initiatives.

The Acting SEC boss said there was the need for all parties involved in the process to work harder to achieve a 100 per cent migration, she said DCS will instil confidence in the market.

She also urged investors and members of the public to exercise extreme caution with regards to crypto currencies as a vehicle of investments, saying that none of the persons, companies or entities promoting crypto currencies has been recognized or authorized by SEC or other regulatory agencies to receive deposit from the public or to provide investments or other financial services within or outside the country.

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