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Rules Governing Sukuk Listing Take Effect After SEC Approval

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Sukuk Islamic bonds

By Dipo Olowookere

The Nigerian Stock Exchange (NSE) last Wednesday disclosed that the rules governing the listing of Sukuk and similar securities have been approved by the Securities and Exchange Commission (SEC).

A notice released by the stock exchange to the investing public revealed that the rules were approved by SEC on March 17, 2016 and would take effect from Monday, July 23, 2018.

Business Post reports that the draft rules were considered by the Rules and Adjudication Committee of Council (RAC) on October 21, 2014, and approved for exposure to stakeholders for comments from October 29 to November 12, 2014.

Thereafter, the RAC considered the draft rules and stakeholders’ comments at its meeting of February 17, 2015, and approved the draft rules for submission to the National Council of the Exchange (Council).

It was further gathered that at its meeting of February 26, 2015, the council approved the draft rules for submission to SEC on March 5, 2015.

According to the approved listing rules obtained by Business Post, SEC said an issuer of sukuk must submit its listing application through a stockbroker after first appointing a Shari’ah adviser recognized or registered with the apex capital market regulator.

Such adviser, SEC explained will carry out primary responsibilities like ensuring that the applicable Shari’ah principles and any relevant resolutions and rulings endorsed are complied with; applying ijtihad (reasoning) to ensure all aspects relating to Sukuk issuance are in compliance with Shari’ah principles amongst others.

It was further stated that the NSE has discretion to admit and list the Sukuk on its platform and may even approve or reject the applications for listing, as it deems fit.

Furthermore, the NSE “may approve applications for listing and quotation of Sukuk or debt securities unconditionally or subject to such conditions, as it deems fit.”

SEC also disclosed in the rules that an Issuer shall, at least one month before the maturity date, announce the maturity date of each issuance of Sukuk or debt securities.

It stated that, “An issuer, which is a foreign corporation, shall announce to the NSE concurrently all information required to be publicly disclosed to its domestic regulatory authorities and other stock exchanges, if applicable.”

The management of SEC also said “an issuer shall announce its half year unaudited or audited financial statements on a consolidated basis within 30 days of the quarter or half year of the issuer’s financial year, and the statements shall state whether there is any abnormal circumstance that has affected or will affect the business and financial position of the issuer.”

“An issuer and its guarantor shall announce to the NSE their respective annual audited financial statements, together with the auditors’ and directors’ reports within three months of their respective financial years.

“In addition to the circumstances set out in the Listings Rules of the NSE, the exchange may at any time de-list an issuer from the Official List in any of the following  circumstances: (a) upon the occurrence of any of the events which the Trustee has declared would render the Sukuk or debt securities to be immediately due and repayable pursuant  to the Trust Deed; (b) upon the maturity or expiration of the Sukuk or debt securities; (c) upon full redemption of the Sukuk or debt securities; or (d) any other circumstances which in the opinion of the NSE, do not warrant the continued listing of the Sukuk or debt securities.”

According to the rules, Sukuk refers to investment certificates or notes of equal value which evidences undivided interest/ownership of tangible assets, usufructs (the right to enjoy a thing, property of which is invested in another) and services or investment in the assets of particular projects or special investment activity using Shari’ah principles and concepts approved by SEC.

View the full rules here

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

NGX Group Targets Private Equity Investments, Mergers, Acquisitions

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NGX Group Shares

By Dipo Olowookere

In order to make shareholders enjoy the benefits of demutualisation and maximize returns, the Nigerian Exchange (NGX) Group Plc is currently undertaking some financial planning activities.

These steps are being engineered by the Group CEO of the organisation, Mr Oscar Onyema, and they include the possibility of mergers and acquisitions, private equity investments, treasury management, capital allocation and fundraising.

According to Mr Onyema, the company is well-positioned to achieve these goals, going by its financial performance in 2020, expressing optimism that these strategies would make the organisation’s shares attract investors when they are eventually listed on the NGX Limited.

“As the group progresses its plans to list on Nigerian Exchange Limited, there are exciting days ahead. The financial performance of the Group in 2020 showed strong resilience and prospects for growth.

“The group ended 2020 in a sound financial position with net asset growth of over 10 per cent to N31.28 billion and income and resulting surplus after tax valued at N6.02 billion and N1.84 billion respectively.

“In the context of COVID-19 pandemic, we maintained tight cost controls, which reduced expenses by 13 per cent despite investments in technology that allowed remote operations with zero downtime,” he had said.

On Thursday, September 9, 2021, the NGX Group held its Annual General Meeting (AGM) in Abuja. It was the first yearly shareholders’ gathering after the demutualisation of the Nigerian Stock Exchange (NSE).

At the meeting, shareholders approved all the resolutions proposed by the board, including the re-election of the non-executive directors who were retiring by rotation; the election of the members of the audit committee; the proposed remuneration for the board and non-executive members of the erstwhile national council of the NSE; and the introduction of equity-based incentives to employees’ remuneration, including an Employee Share Ownership Plan (ESOP) and a Performance-Based Long-Term Incentive Plan.

NGX Group, leading by example as a new corporate entity, is committed to the highest governance standards, recognising its role in critical capital markets infrastructure.

Much like leading exchanges in the world today (London Stock Exchange Group, Intercontinental Exchange, Singapore Exchange, Japan Exchange Group) and other African exchanges such as Johannesburg Stock Exchange and FMDQ, the demutualised NSE gave rise to a group structure with attendant benefits.

Today, NGX Group stands as the non-operating holding company with three (3) subsidiaries – the operating Exchange, Nigerian Exchange Limited led by Mr Temi Popoola, as the Chief Executive Officer (CEO); the independent regulatory company, NGX Regulation Limited led by Ms Tinuade Awe as the CEO; and the real estate company, NGX Real Estate with Mr Gabriel Igbeka serving as Acting CEO. Each of these entities is governed by independent boards, the composition of which was not only strategic but in line with acceptable practices.

At an Extra-Ordinary General Meeting (EGM) of the then members of NSE in March 2020, a resolution was passed pertaining to the appointment of the inaugural board of NGX Group, post demutualisation.

The process relating to the selection of council (board) members was duly followed and the identified candidates were taken through a rigorous due diligence exercise before passing through the internal governance process, being submitted to the Securities and Exchange Commission for approval and thereafter, presented to previous members at the 2020 EGM.

The members agreed to the importance of maintaining continuity and preserving The Exchange’s collective knowledge and learned experience (institutional memory) as well as retaining stakeholder confidence and maintaining market stability.

It was, therefore, agreed that the composition of the Boards would comprise individuals selected from the erstwhile National Council and external candidates. This understanding was contained in the Scheme of Arrangement dated 20 January 2020 between the NSE and the dealing and ordinary members of the NSE in respect of the demutualisation of the exchange (the Scheme).

The scheme was approved at the Court Ordered meeting held on 3 March 2020. The approved Scheme of Arrangement was sanctioned by the court on May 14, 2020, and filed at the Corporate Affairs Commission (CAC) on June 1, 2020, and it became effective on the date it was filed at the CAC.

NGX Group’s board currently has 11 members and out of the 11 directors, five have direct or indirect shareholdings in the company providing strong representation for the company’s shareholders.

In addition, going above the statutorily required minimum that a public company shall have at least three independent directors (S.275 (1) CAMA 2020), NGX Group went with four independent directors.

Transition agreements expected to last for 18 months were also agreed and it was recognized that subsequent composition of the Board following this transition period will evolve in line with existing rules and regulations, market standards, competitive realities and succession planning policies.

The composition of the inaugural board – comprising some members of the erstwhile council and new members – was approved at the EGM, on the condition that their appointment would become effective post demutualisation.

The market continues to repose confidence in NGX Group evidenced by the statement from the Chairman, Association of Securities Dealing Houses of Nigeria, representing the largest shareholder group in the company, Mr Onyewenchukwu Ezeagu, who stated prior to the recent 60th AGM, “As major shareholders, we were involved in all the processes of demutualisation.

“We are comfortable with the agenda of the meeting as we have been part of the whole process. The proposed resolutions had been made public in the course of the demutualisation. The meeting will bring about a renewed relationship between the NGX Group and its stakeholders.”

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Economy

Buhari Orders Kyari to Incorporate NNPC, Ararume to Chair Board

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NNPC profit 44 years

By Aduragbemi Omiyale

President Muhammadu Buhari has directed the incorporation of the Nigerian National Petroleum Company Limited, a statement from the presidency on Sunday confirm.

The Group Managing Director (GMD) of NNPC, Mr Mele Kyari, was asked to see to the success of this directive, the Special Adviser to the President on Media and Publicity, Mr Femi Adesina, disclosed in the statement issued today.

The President’s spokesman said this order was given by Mr Buhari in his capacity as the Minister of Petroleum Resources “in consonance with Section 53(1) of the Petroleum Industry Act 2021, which requires the Minister of Petroleum Resources to cause for the incorporation of the NNPC Limited within six months of commencement of the Act in consultation with the Minister of Finance on the nominal shares of the company.”

The NNPC chief was, therefore, given the mandate to “take necessary steps to ensure that the incorporation of the NNPC Limited is consistent with the provisions of the PIA 2021.”

A few weeks ago, the President signed the PIA, giving room for the state-owned oil agency to become a commercial organisation under the Companies and Allied Matters Act (CAMA) 2020.

Before now, the NNPC was operating as a government agency and was solely responsible for the importation of petrol into the country.

But as a part of efforts to make the oil industry more attractive to investors, the government made the sector more transparent by signing the PIA into law.

In the statement issued today, Mr Adesina said President Buhari, by the power also vested in him under Section 59(2) of the PIA 2021, has approved the appointment of the board and management of the NNPC Limited, with effect from the date of incorporation of the company.

It was disclosed that Mr Ifeanyi Ararume was selected as the chairman of the board, while Mr Kyari and Umar Ajiya are to serve as the Chief Executive Officer and Chief Financial Officer, respectively.

“Other board members are Dr Tajudeen Umar (North East), Mrs Lami O. Ahmed (North Central), Mallam Mohammed Lawal (North West), Senator Margaret Chuba Okadigbo (South East), Barrister Constance Harry Marshal (South South), and Chief Pius Akinyelure (South West),” the statement said.

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Economy

Interswitch Recruits More Quickteller Paypoint Agents

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Quickteller Paypoint agents

By Modupe Gbadeyanka

More Quickteller Paypoint agents have been recruited in a recent market activation drive targeted at cities across Nigeria to grow the nation’s economy and deepen financial inclusion.

The new agents will be gainfully engaged and empowered to generate income, provide financial services and grow to empower others subsequently.

This is under the Interswitch Financial Inclusion Services (IFIS) and the agent will offer the company’s services in Agege, Alimosho, Ikorodu and Ajah, with some areas in Abuja expected to be reached next week.

They will be expected to easily carry out regular financial transactions such as bill payment, funds transfer, cash deposits, cash withdrawals, account opening, insurance and airtime recharge etc.

“Quickteller Paypoint is designed to empower Nigerians by creating income-generating opportunities for unemployed Nigerians and increase streams of income for employed Nigerians thereby facilitating business in both the rural and urban parts of Nigeria,” the Group Head, Growth Marketing, Merchant and Ecosystem at Interswitch, Mr Olawale Akanbi, stated.

“This activation by Quickteller Paypoint is looking to onboard new agents on the Quickteller Paypoint platform.

“By so doing, we are not only empowering Nigerians to earn income, but we are also providing them a platform with which they are able to provide meaningful services to their communities and eventually grow to employ and empower others,” he added.

The recruited agents and other potential agents are onboarded by registering on the Quickteller Paypoint platform. Required documentations include; passport photograph, recent utility bill (electricity, waste or water bill) that shows the location, a valid ID card (National ID, Voter’s card, driver’s license or international passport) and business registration documents (if the business name is CAC registered).

After registration, the agent is required to fund his/her wallet with at least N1000, this qualifies him/her for a free android POS and starter kit. The starter kit contains free visibility banner, power bank and daily journal to document transactions.

In addition, Quickteller agents enjoy competitive commissions and stimulating incentives such as travel opportunities, trainings, business support etc. helping them grow and scale their businesses faster.

Quickteller Paypoint platform is a service of Interswitch Group enabled to support the financial inclusion agenda of the federal government. Currently, Quickteller Paypoint has over 35,000 agents spread across the country.

Quickteller Paypoint is the trade name for Interswitch Financial Inclusion Services (IFIS) Agent locations. It is a one-stop-shop robust consumer service platform for convenient airtime recharge, funds transfer and bill payment.

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