By Dipo Olowookere
From January 1, 2022, the Securities and Exchange Commission (SEC) will begin to charge regulatory fees on bond transactions at the secondary market.
A notice from the agency said this action is pursuant to Section 13(u) of the Investments and Securities Act (ISA), 2007 and Schedule 1, Part D of the SEC Rules (Registration Fees, Minimum Capital Requirements, Securities and others) which empower it to levy, among others, fees on transactions relating to investments and securities business in Nigeria.
According to the circular dated December 15, 2021, a fee of 0.025 per cent would be charged on the total value of all secondary market transactions on bonds.
It further stated that the securities exchange, including the Nigerian Exchange (NGX) Limited and FMDQ Securities Exchange, on which the transactions occurred, will charge an amount not exceeding 0.025 per cent of the trades, while the bond transactions by dealing members, who are majorly the brokerage firms, will attract a single regulatory fee of 0.0001 per cent of the total value of the transactions, though they are exempt from the initial 0.025 per cent fee.
SEC, which is the apex regulatory body for the capital market in Nigeria, stated that this new fee structure “supersedes previous directives” given by the commission on the subject.
“This circular is made pursuant to Section 13(u) of the Investments and Securities Act (ISA), 2007 and Schedule 1, Part D of the SEC Rules (Registration Fees, Minimum Capital Requirements, Securities and others) which empower the Securities and Exchange Commission (SEC) to levy, among others, fees on transactions relating to investments and securities business in Nigeria.
“The circular stated that Capital Market Operators (CMOs) and stakeholders generally are hereby notified that: a regulatory fee structure on secondary market transactions on Bonds will take effect from January 1, 2022, and secondary market transactions on bonds shall include bond transactions executed on a securities exchange (exchange), reported by voice or by any other means to exchange as having being transacted thereon or of which the information of the transaction details are featured on the exchange’s platform for purposes including but not limited to onward transmission to a depository for settlement, price discovery and corporate disclosure.
“The circular also stated that by this fee structure, the SEC will charge 0.025% of the total value of all secondary market transactions on bonds, while the securities exchange on which the transaction occurs will charge an amount not exceeding 0.025% of the total value of secondary market transactions on bonds while bond transactions by dealing members will attract a single regulatory fee of 0.0001% of the total value of the secondary market transactions on bonds, and are exempt from the 0.025% fee charge earlier stated,” the disclosure said.
In another development, the SEC has informed all CMOs that the annual renewal of registration for the year 2022 will commence from 1st January, 2022.
It stated that in line with its rules and regulations, all CMOs are to complete the process of renewal of registration for 2022 on or before January 31, 2022, via www.eportal.sec.gov.ng.
“For enquiries or support in completing the process, please contact any of the persons below listed; Franca Isiguzoro, [email protected]; Nakwada Ahmed, [email protected]; Zarami Abubakar, [email protected]; and Okechukwu Callista, [email protected].”
Adedapo Adesanya