NSE Restructures Trading of REITS, Closed End Funds

By Modupe Gbadeyanka

The Nigerian Stock Exchange (NSE) has announced proposed changes to the framework regarding the trading of Real Estate Investment Trusts (REITs); and Closed End Funds listed on its platform over the next three quarters of 2017.

In a statement posted on its website, the NSE said under the new rules, REITs and Closed End Funds listed on its platform would be required to submit quarterly financials and audited full year financial statements via the NSE X-Issuer Portal.

It also said, “The financials will be accessible to the pubic via the NSE’s website and other NSE platforms.”

The statement noted that, “REITs and Closed End Funds listed on the NSE are to submit on a weekly basis, key performance metrics (as applicable) to the NSE which will be accessible via the NSE’s website. In addition, the Fund Managers will be required to post the information on their website.”

According to the new rules, the information to be provided will include Net Asset Value (NAV), Number of properties, Property type/distribution, Occupancy rates, Delinquency rates on rents, Average Property age, and any other relevant information.

The NSE revealed that REITs and Closed End Funds listed on its platform would be reclassified from the Main Board to a separate board specially created for REITs and Closed End Funds under the Equities Market.

It explained that the changes will “make it easier for existing and potential investors to access information required to make investment decisions thereby contributing to the growth of these products in our market.”

In view of these changes, fund Managers to the REITs and Closed End Funds have been advised to embark on consistent marketing campaign on the developments, and provide detailed information to sensitize and educate investors about this asset class, as a viable alternative investment vehicle.

The NSE said it looks forward to partnering with its esteemed issuers, investors and other stakeholders, on its course towards delivering service excellence, and a first rate capital market experience that will cement its position as Africa’s foremost securities exchange.

It pointed out that it was planning to “host the first REITs Workshop before the end of the second quarter of 2017, to further engage with the relevant stakeholders within the market, on the proposed developments.”