Aduragbemi Omiyale
By Aduragbemi Omiyale
A move aimed to boost the integrity of capital market instruments has been taken by the Securities and Exchange Commission (SEC), the apex regulatory agency for the ecosystem.
A circular issued on Thursday by SEC disclosed that it would henceforth require issuers to obtain and submit a letter of No Objection from their respective regulators when filing for applications for issuance, including bonds, commercial papers, rights issue, others.
In the disclosure, the agency said the letter of No Objection should cover confirmation that there has not been any material change(s) in the financial statements of the issuer/sponsor from the last accounting year end to date; names of current members of the board of directors; and No Objection to the proposed issuance.
“Please be informed that wherein relevant instances, an application is not accompanied by a letter of No-Objection, such submission will be considered to be incomplete and would not be processed,” a part of the notice emphasised.
According to SEC, this move has become necessary in a bid to further improve its transaction turn-around period and enhance the integrity of capital market instruments.
“The commission hereby draws the attention of issuing houses to the due diligence requirement for a No Objection letter from primary regulators of issuers, especially those in the banking and insurance sectors, as a prerequisite for the commission’s approval of proposed transactions,” it stated.
