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Economy

SEC Publishes Rules for Exposure

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Securities and Exchange Commission

By Dipo Olowookere

  1. New Rule

Asset Manager Code of Professional Conduct

1.1 General Principles of Conduct

Managers have the following responsibilities to their clients.

Managers must:

  1. Act in a professional and ethical manner at all times.
  2. Act for the benefit of clients.
  3. Act with independence and objectivity.
  4. Act with skill, competence, and diligence.
  5. Communicate with clients in a timely and accurate manner.
  6. Uphold the applicable rules governing capital markets.

1.2 Code of Professional Conduct

1.2.1 Obligation to clients

Managers must:

  1. Place client interests before their own.
  2. Preserve the confidentiality of information communicated by clients within the scope of the Manager–client relationship.
  3. Refuse to participate in any business relationship or accept any gift that could reasonably be expected to affect their independence, objectivity, or loyalty to clients.

1.2.2 Investment Process and Actions

Managers must:

  1. Use reasonable care and prudent judgment when managing client assets.
  2. Not engage in practices designed to distort prices or artificially inflate trading volume with the intent to mislead market participants.
  3. Deal fairly and objectively with all clients when providing investment information, making investment recommendations, or taking investment action.
  4. Have a reasonable and adequate basis for investment decisions.
  5. When managing a portfolio or pooled fund according to a specific mandate, strategy, or style:
  6. Take only investment actions that are consistent with the stated objectives and constraints of that portfolio or fund.
  7. Provide adequate disclosures and information so investors can consider whether any proposed changes in the investment style or strategy meet their investment needs.
  8. When managing separate accounts and before providing investment advice or taking investment action on behalf of the client:
  9. Evaluate and understand the client’s investment objectives, tolerance for risk, time horizon, liquidity needs, financial constraints, any unique circumstances (including tax considerations, legal or regulatory constraints, etc.) and any other relevant information that would affect investment policy.
  10. Determine that an investment is suitable to a client’s financial situation.

1.2.3 Trading

Managers must:

  1. Not act or cause others to act on material non-public information that could affect the value of a publicly traded investment.
  2. Give priority to investments made on behalf of the client over those that benefit the Managers’ own interests.
  3. Use commissions generated from client trades to pay for only investment-related products or services that directly assist the Manager in its investment decision making process, and not in the management of the firm.
  4. Maximize client portfolio value by seeking best execution for all client transactions.
  5. Establish policies to ensure fair and equitable trade allocation among client accounts.

1.2.4 Risk Management, Compliance and Support

Managers must:

  1. Develop and maintain policies and procedures to ensure that their activities comply with the provisions of this Code and all applicable legal and regulatory requirements.
  2. Appoint a compliance officer responsible for administering the policies and procedures and for investigating complaints regarding the conduct of the Manager or its personnel.
  3. Ensure that portfolio information provided to clients by the Manager is accurate and complete and arrange for independent third-party confirmation or review of such information.
  4. Maintain records for an appropriate period of time in an easily accessible format.
  5. Employ qualified staff and sufficient human and technological resources to thoroughly investigate, analyze, implement, and monitor investment decisions and actions.
  6. Establish a business-continuity plan to address disaster recovery or periodic disruptions of the financial markets.
  7. Establish a firm-wide risk management process that identifies, measures, and manages the risk position of the Manager and its investments, including the sources, nature, and degree of risk exposure.

1.2.5 Performance and Valuation

Managers must:

  1. Present performance information that is fair, accurate, relevant, timely, and complete. Managers must not misrepresent the performance of individual portfolios or of their firm.
  2. Use fair-market prices to value client holdings and apply, in good faith, methods to determine the fair value of any securities for which no independent, third-party market quotation is readily available.

1.2.6 Disclosures

Managers must:

  1. Communicate with clients on an ongoing and timely basis.
  2. Ensure that disclosures are truthful, accurate, complete, and understandable and are presented in a format that communicates the information effectively.
  3. Include any material facts when making disclosures or providing information to clients regarding themselves, their personnel, investments, or the investment process.
  4. Disclose the following:
  5. Conflicts of interests generated by any relationships with brokers or other entities, other client accounts, fee structures, or other matters.
  6. Regulatory or disciplinary action taken against the Manager or its personnel related to professional conduct.
  7. The investment process, including information regarding lock-up periods, strategies, risk factors, and use of derivatives and leverage.
  8. Management fees and other investment costs charged to investors, including what costs are included in the fees and the methodologies for determining fees and costs.
  9. The amount of any soft or bundled commissions, the goods and/or services received in return, and how those goods and/or services benefit the client.
  10. The performance of clients’ investments on a regular and timely basis.
  11. Valuation methods used to make investment decisions and value client holdings.
  12. Shareholder/unit holder voting policies.
  13. Trade allocation policies.
  14. Results of the review or audit of the fund or account.
  15. Significant personnel or organizational changes that have occurred at the Manager.
  16. Risk management processes.

2.0 Sundry Amendments

2.1 Amendment to Rule on Trading In Unlisted Securities – Inclusion of Debt Securities

  1. Existing Rule (a)

All Securities of unlisted public companies shall be bought, sold or transferred only by means of a system approved by the Commission and under such terms and conditions as the Commission may prescribe from time to time.

A slight amendment replacing the words “unlisted public” with “public unlisted” is being proposed. The new Rule will read as follows:

(a) All securities of public unlisted companies shall be bought, sold or transferred only by means of a system approved by the Commission and under such terms as the Commission may prescribe from time to time.

  1. New Rule (b) to provide as follows:

(b) All debt securities issued in Nigeria, i.e. issued by the Federal Government of Nigeria (“FGN”), Subnationals (State and Local Government), Supranational and Corporate entities, shall be bought, sold or transferred in the secondary market only through a SEC registered trading facility or Securities Exchange.

  1. A new Rule (c) to include regulation of trading in foreign currency securities of Nigerian entities listed in other jurisdictions is proposed as follows:

(c) All exchange of debt securities traded (including foreign currency securities of Nigerian entities listed in other jurisdictions e.g. Eurodollar bonds) in the Nigerian capital market shall be executed on or reported to a SEC-registered Securities Exchange or trading facility.

  1. Existing Rule (b) which provides that:

No person shall buy, sell or otherwise transfer securities of an unlisted public company except through the platform of a registered securities exchange established for the purpose of facilitating over-the-counter trading of securities.

To be slightly amended and renumbered as Rule (d) to compel trading of securities of public companies on SEC-registered platforms only, is proposed as follows:

(d) No person shall buy, sell or otherwise transfer securities of a public unlisted company or government agency except through the platform of a SEC-registered securities exchange or trading facility established for the purpose of facilitating over-the-counter trading of securities.

  1. Existing Rule (c) which provides that:

Any unlisted public company, director, company secretary, registrar, broker/dealer or such other persons who facilitates the buying, selling or transfers of the securities of an unlisted public company otherwise than through the platform of a registered securities exchange, shall be liable to a penalty of not less than N100, 000 in the first instance and not more than N5, 000 for every day the infraction continues.

The existing Rule (c) as outlined above to be slightly amended and renumbered as Rule (e) to read as follows:

  1. Any public unlisted company, director, company secretary, registrar, broker/dealer or such other persons who facilitate the buying, selling or transfer of the securities of a public unlisted company or government agency otherwise than through the platform of a SEC-registered securities exchange or trading facility shall be liable to a penalty of not less than N100,000 in the first instance and not more than N5,000 for every day of default.

2.2 Review of Capital Requirement for Sub-Brokers

  1. Existing Rule 67(1)(j) which provides that Corporate Sub-Broker (to show) evidence of minimum paid-up capital of N1million.

Amendment of Rule 67(1)(j) to provide that Corporate Sub-Broker (to show) evidence of minimum paid-up capital of N10million.

  1. Existing Schedule I, Part B(5) which reflects N5million as minimum paid up capital requirement for Corporate Sub-Brokers

Amendment of Schedule I, Part B(5) to reflect N10million as minimum paid up capital requirement for Corporate Sub-Brokers

  1. Existing Rule 67(2)(a)(ii) which provides that Individual Sub-Broker (to show) evidence of minimum net worth of N500,000.00

Amendment of Rule 67(2)(a)(ii) to provide that Individual Sub-Broker (to show) evidence of minimum net worth of N1million.

  1. Existing Schedule I, Part B(6) which reflects N500,000.00 as minimum net worth requirement for Individual Sub-Brokers.

Amendment of Schedule I Part B(6) to reflect N1million as minimum net worth requirement for Individual Sub-Brokers.

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

Dollar Shortages Strike Again…Nigeria Indexes in Crosshairs

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dollar shortages

By Lukman Otunuga

Despite oil prices surging to multi-year highs, Nigeria has failed to cash in.

The destructive combination of sub-optimal oil production, poor infrastructure, and fuel subsidies have drained oil revenues that account for roughly 90% of foreign exchange earnings.

Lower oil revenues and falling foreign exchange reserves are forcing Nigeria to ration dollars. The negative impacts continue to be reflected across the economy and local currency. But now the dollar shortages have attracted the attention of MSCI Inc. which is considering downgrading the MSCI Nigeria indexes to the status of a standalone market from frontier markets.

It is worth keeping in mind that a developed market is the highest ranking, followed by emerging markets, frontier markets, and then finally standalone markets at the bottom.

Given the difficulty in repatriating funds from Nigeria, this has placed the MSCI Nigeria Indexes in the crosshairs. Such a negative development may hit sentiment toward the county’s assets at a crucial period where economic growth remains fragile.

To add insult to injury, the NGX All Share Index has gained roughly 20% this year in local currency terms. A blockbuster performance when compared to the MSCI Emerging market Index which is down roughly -19%.

In other news, the Naira was trading around N419 versus the dollar on the official spot rate and has weakened only 1.3% year-to-date. However, on the Peer-to-Peer (P2P) segment of the FX, the Naira ended Thursday at N620 versus the dollar and N602 on the black market. Nigeria still faces the issue of multiple exchanges but this will be a discussion for another time.

Lukman Otunuga is a Senior Research Analyst at FXTM

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Economy

Binance, Cristiano Ronaldo to Release Exclusive NFTs

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Binance Cristiano Ronaldo

By Adedapo Adesanya

Binance, the world’s leading blockchain ecosystem and cryptocurrency infrastructure provider, has announced the signing of an exclusive and multi-year NFT partnership with football icon, Cristiano Ronaldo.

Through this partnership, Binance will launch a global campaign aiming to give Ronaldo’s fans an introduction to Web3 with a compelling entry point into the world of NFTs.

The company disclosed that over the course of the agreement, Cristiano Ronaldo and Binance will create a series of collections for sale exclusively on the Binance NFT platform.

The first collection of the exclusive NFTs will be released later this year and will feature designs created in collaboration with Ronaldo.

Speaking on the deal, Binance founder and Chief Executive Officer, Mr Changpeng “CZ” Zhao said, “Cristiano Ronaldo is one of the world’s best footballers, and has transcended sport to become an icon in multiple industries.

“He has amassed one of the world’s most dedicated fan bases through his authenticity, talent, and charity work.”

“We are thrilled to provide his fans with exclusive engagement opportunities to connect with Ronaldo and own a piece of iconic sports history,” he added.

“My relationship with the fans is very important to me, so the idea of bringing unprecedented experiences and access through this NFT platform is something that I wanted to be a part of,” said Ronaldo.

“I know the fans are going to enjoy the collection as much as I do.”

The Cristiano Ronaldo NFT collections will be available exclusively on Binance NFT at www.Binance.com/en/nft/home.

Binance is the world’s leading blockchain ecosystem and cryptocurrency infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume.

The Binance platform is dedicated to increasing the freedom of money for users, and features an unmatched portfolio of crypto products and offerings, including trading and finance, education, data and research, social good, investment and incubation, decentralization and infrastructure solutions, and more.

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Economy

Cellulant Wins Payment Platform Solutions Provider of the Year 

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Cellulant

By Adedapo Adesanya

Cellulant, Africa’s leading payments company, has been awarded the Payment Platform Solutions Provider of the Year in Nigeria at the 13th Beacon of ICT Awards 2022.

This award is a recognition of Cellulant’s work in providing a payments platform that focuses on driving merchant business and digital payments for local, regional and global merchants in the continent.

It was also lauded for digitising both online and offline payments.

The award was presented to Cellulant Nigeria by Communication Week Media Limited, the publishers of Nigeria Communications Week.

The annual event, which recognises leading players in the ICT sector in Nigeria whose outstanding achievements contribute to the industry’s growth, was themed Impact of Blockchain Technology in a Digitalized Nigeria. 

Renowned businesses such as Emirates, GIG logistics, Coldstone, Bolt, Dominos and Ethiopian Airlines to name a few, have partnered with Cellulant to use their Tingg digital payments solution as a single collection gateway in Nigeria.

Cellulant simplified their product, unifying their offering into Tingg — a digital payments platform that addresses the complex needs of managing different payment channels for a business.

This has made it easy for businesses to conveniently and affordably accept payments from a single integration.

Customers can make payments for goods and services using locally relevant payment options.

Founded in 2003, Cellulant has more than 18 years of experience providing locally-relevant payment solutions for businesses and their consumers. Its evolution over the years, from a digital content business to mobile banking and now to payments, has allowed the company to build an expansive network, strong relationships and partnerships.

Cellulant provides a unified, single-contract, and single API payments platform – named Tingg- that makes it easy for businesses to receive and make payments; while allowing anyone to pay from their mobile money, local and international cards or directly from their bank.

Today, Cellulant has an office presence in 18 countries, including Nigeria, with a payments platform connecting thousands of businesses with 257 payment options across 35 countries. The platform powers payments for 200 million consumers on a single inclusive network for interoperability across Africa.

Speaking on the recognition, Mr Opeyemi Fowler, Cellulant’s Head of Enterprise Sales stated “the digital payments landscape in Nigeria and Africa is evolving rapidly with differing payment channels such as card, mobile money, bank transfer and cash – with volatile currency fluctuations and no single settlement framework.

“This is creating a highly fragmented landscape for businesses whose customers increasingly request to pay for their purchases using digital payment options. Every day, our job at Cellulant is to work with our customers and partners to solve this fragmentation in payments.”

“This award is a testament to our work in providing a payments platform that is transforming the way people do business in Nigeria and beyond; and a reflection of the hard work done by our people.”

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