Economy
Explainer: What is Nigeria’s SEC New Rule on Shariah Advisory Services?
By Adedapo Adesanya
The Securities and Exchange Commission (SEC) has revealed new rules on Shariah Advisory Services for non-interest capital market products and services.
According to the SEC, Shariah governance is crucial, considering compliance with Shariah rules and principles is important in non-interest capital market operations/transactions.
“The provision of the rules is in line with local and international best practices. The regulatory organisation in the Nigerian Financial System, such as CBN and NAICOM, have issued such guidelines to provide clear and good Shariah governance in their respective sectors.
“Making the Shariah Advisory service a registrable function in the market will assist in effective implementation of the proposed consolidation of the Shariah governance rules and will also be an additional source of revenue to the commission,” the agency stated.
SEC stated that the non-interest capital market activities in recent times are exponentially increasing as the market is witnessing the entrance of more asset managers, the emergence of i-REIT, listing of sovereign Sukuk on the exchanges, issuance of corporate Sukuk, the emergence of shariah advisory function, among others.
“These developments, coupled with the necessity of Shariah services for the market, affirms the critical need for a framework/guideline to set a minimum standard for persons (corporate or individual) seeking to provide shariah advisory services for non-interest capital market activities.
“The guideline is essential for the development of this nascent sector, as it will promote transparency and confidence whilst creating a level playing field for all participants in the market.”
Further to the above, the commission stated that a review exercise on its existing rules on shariah governance undertaken by the Standing Committee of Deepening Non-interest Capital Market led to the recommendation that rules be drafted to provide for the registration and regulation of shariah advisory services in line with international best practices. Hence, the proposed Rules for Shariah Advisory Services for Non-Interest Capital Market Products and Services.
Going by the Rule, an issuer or fund manager, with the consent of the trustee (where applicable), shall appoint a Shariah Adviser to provide Shariah Advisory services for Shariah products, issuances, and schemes.
A capital market operator seeking to provide Shariah-compliant products and services shall appoint a registered Shariah Adviser for the firm and notify the Commission of such appointment within five (5) business days of the appointment.
The rule stipulates that the SEC may register a Shariah Adviser or renew the registration of a registered Shariah Adviser subject to the applicant satisfying some criteria.
This means that only an individual eligible to provide Shariah Advisory services under these rules shall satisfy the following requirements and this can only be done by a person that meets the following requirement: Possession of a minimum of a Bachelor’s degree in Shariah, which includes study in Usul Fiqh (principles of Islamic jurisprudence) or Fiqh Muamalat (Islamic transaction/commercial law) or a person with vast knowledge in Usul Fiqh (principles of Islamic jurisprudence) or FiqhMuamalat (Islamic transaction/commercial law) acquired through Islamic system of education.
Others include the ability to read and write in Arabic and English Language respectively and possession of basic knowledge of business or finance, particularly in Islamic finance and capital market.
On experience, the applicant is expected to have at least two years of relevant experience in Islamic finance; or have at least one year of relevant experience in Islamic finance and have attended at least five relevant Islamic finance courses/workshops.
The rule also states that the roles and responsibilities of a Shariah adviser shall include: Advising on all aspects of the Non-Interest Capital Market Products and Services, including documentation and structuring;
Issuing Shariah certification, which outlines the basis and rationale of the structure and mechanism, the applicable Shariah principles used and relevant Shariah matters relating to the documentation of the Non-Interest Capital Market Products and Services; Providing Shariah expertise/guidance on all matters, particularly on investment instruments and Reviewing compliance reports of the Shariah product’s proceeds utilization (where applicable) to ensure that investment activities are Shariah compliant.
Other roles and responsibilities are: Providing a periodic report to the trustees certifying whether Sukuk proceeds, Islamic fund, or any other Non-Interest Capital Market products have been managed/administered in accordance with Shariah principles and rules; Ensuring that the applicable Shariah principles and any relevant resolutions and rulings endorsed are complied with; Applying ijtihad (where applicable) to ensure all aspects of the Non-Interest Capital Market products comply with Shariah principles; and accountability for the quality, accuracy, and soundness of his own decision or advice.
The Rule also places some restrictions as a Shariah adviser cannot accept any appointment in more than one registered Islamic Fund Management Company/Fund Management company offering Islamic products provided that the Shariah Adviser could serve in multiple Fund Management Companies with the consent of the Fund Managers, Trustees, and prior approval of the SEC.
Also, a Shariah Adviser is expected to immediately disclose to the Commission, Issuing House, or Fund Manager any circumstances that may affect his ability to meet any of the requirements of the rule.
Registered Shariah Advisers shall be exempted from appointing compliance officers as required under the Commission’s Rules and Regulation on Appointment of Compliance Officers.
By Adedapo Adesanya
The duo of Geo-Fluids Plc and Afriland Properties Plc propelled the NASD Over-the-Counter (OTC) Securities Exchange up 0.13 per cent on Friday, January 10.
Investors gained N1.4 billion during the trading session after the market capitalisation of the bourse ended at N1.053 trillion compared with the previous day’s N1.052 trillion, and the NASD Unlisted Security Index (NSI) increased at the close of business by 4.07 points to wrap the session at 3,073.93 points compared with 3,069.86 points recorded at the previous session.
Geo-Fluids added 25 Kobo to its value to close at N4.85 per unit compared with the previous session’s N4.60 per unit, and Afriland Properties Plc gained 24 Kobo to close at N16.25 per share versus Thursday’s closing price of N16.01 per share.
There was a 35.4 per cent fall in the volume of securities traded in the session as investors exchanged 4.3 million units compared to 6.6 million units traded in the preceding session, the value of shares traded yesterday went down by 37.4 per cent to N17.2 million from the N27.5 million recorded a day earlier, and the number of deals decreased by 47.2 per cent to 19 deals from the 36 deals recorded in the preceding day.
FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and Industrial and General Insurance (IGI )Plc with 10.7 million units sold for N2.1 million.
IGI Plc closed the day as the most active stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.
By Adedapo Adesanya
The Naira witnessed a depreciation on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, January 10.
According to data from the FMDQ Exchange, the local currency weakened against the greenback yesterday by 0.12 per cent or N1.80 to sell for N1,543.03/$1 compared with the preceding day’s N1,541.23/$1.
The pressure on the domestic currency came as the access granted to the Bureaux de Change (BDC) operators by the Central Bank of Nigeria (CBN) to purchase FX from the official market through the Electronic Foreign Exchange Matching System (EFEMS) platform prepares to end next week, precisely on January 19.
The CBN had given a 42-day window to the operators to access the platform to help stabilise the Naira in December, and this expires next week.
On Friday, the Nigerian currency tumbled against the Pound Sterling in the official market by N30.78 to sell for N1,889.29/£1 compared with the previous day’s N1,858.51/£1, but gained N5.48 against the Euro to finish at N1,583.81/€1, in contrast to Thursday’s rate of N1,589.29/€1.
As for the parallel market, the Nigerian Naira remained stable against the US Dollar during the trading session at N1,650/$1, according to data obtained by Business Post.
In the cryptocurrency market, it was bearish as the US economy added 256,000 jobs last month, the Bureau of Labor Statistics reported on Friday, topping forecasts for 160,000 and up from 212,000 in November (revised from an originally reported 227,000).
However, the readings came after a number of recent economic reports triggered a broad-market pullback across asset classes such as crypto as investors quickly scaled back the idea of a continued series of Federal Reserve rate cuts in 2025.
Cardano (ADA) fell by 3.6 per cent to trade at $0.921, Solana (SOL) slumped by 2.8 per cent to $185.93, Ethereum (ETH) depreciated by 1.4 per cent to $3,233.27, Litecoin (LTC) lost 1.3 per cent to finish at $103.62, Dogecoin (DOGE) shed 0.5 per cent to sell at $0.3315, Bitcoin (BTC), waned by 0.2 per cent to $94,154.43, and Binance Coin (BNB) went south by 0.1 per cent to $693.30.
On the flip side, Ripple (XRP) jumped by 1.5 per cent to settle at $2.34, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 each.
By Dipo Olowookere
Profit-takers took control of Customs Street on Friday, plunging it by 0.08 per cent at the close of trading activities.
The sell-offs were across all the key sectors of the Nigerian Exchange (NGX) Limited on last trading session of the week.
The insurance space went down by 1.53 per cent, the banking index depreciated by 0.41 per cent, the consumer goods sector weakened by 0.16 per cent, and the energy counter slumped by 0.08 per cent, while the industrial goods sector closed flat.
At the close of business, the All-Share Index (ASI) tumbled by 79.68 points to 105,451.06 points from 105,530.74 points and the market capitalisation retreated by N48 billion to N64.303 trillion from N64.351 trillion.
Yesterday, investors traded 1.5 billion shares worth N19.4 billion in 12,877 deals compared with the 489.5 million shares worth N13.1 billion transacted in 13,010 deals in the preceding day, indicating a decline in the number of deals by 1.02 deals and a rise in the trading volume and value by 203.14 per cent and 48.09 per cent, respectively.
Wema Bank was the busiest stock with 976.2 million units valued at N9.8 billion, Tantalizers traded 53.0 million units worth 129.6 million, Universal Insurance sold 34.8 million units for N26.8 million, Access Holdings exchanged 33.9 million units valued at N843.8 million, and Nigerian Breweries traded 27.3 million units worth N873.3 million.
The heaviest loss was suffered by Sunu Assurances with a decline of 9.99 per cent to trade at N7.30, Eunisell shed 9.96 per cent to N17.35, SAHCO crumbled by 9.87 per cent to N30.15, DAAR Communications plunged by 9.28 per cent to 88 Kobo, and Sovereign Trust Insurance went down by 7.04 per cent to N1.32.
On the flip side, C&I Leasing gained 10.00 per cent to close at N4.51, Honeywell Flour appreciated by 9.99 per cent to N10.02, Trans Nationwide Express jumped by 9.89 per cent to N2.00, RT Briscoe rose by 9.83 per cent to N2.57, and Secure Electronic Technology grew by 9.46 per cent to 81 Kobo.
Business Post reports that the bourse ended with 33 price gainers and 25 price losers, indicating a positive market breadth index and strong investor sentiment.
-
Feature/OPED5 years agoDavos was Different this year
-
Travel/Tourism8 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz2 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking7 years agoSort Codes of GTBank Branches in Nigeria
-
Economy2 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking2 years agoFirst Bank Announces Planned Downtime
-
Sports2 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn
-
Technology4 years agoHow To Link Your MTN, Airtel, Glo, 9mobile Lines to NIN