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SEC Publishes Rules for Exposure



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

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NNPC Rules Out Return of Subsidy on Diesel



Buy Diesel

By Adedapo Adesanya

Nigerians nursing the idea of the return of subsidy payment on Automotive Gas Oil (AGO), also known as diesel, may have to perish it as the Nigerian National Petroleum Company (NNPC) has said such will not happen anytime soon.

Diesel was deregulated and in recent times, the price has continued to rise up to N850 per litre due to the invasion of Ukraine by Russia and this has pushed the prices of food items and others higher.

The Chief Executive Officer (CEO) of NNPC, Mr Mele Kyari, while appearing before the House of Representatives Committee on Downstream, alongside the CEO of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed and others, stated that the government cannot introduce subsidy on diesel due to a number of reasons, including the strain brought about by the scarcity of foreign exchange (forex) in the country.

The lawmakers had summoned stakeholders in the oil and gas sector to an investigative hearing over fuel scarcity and the rising cost of Premium Motor Spirit (also known as petrol), diesel, and Liquefied Petroleum Gas (LPG also known as cooking gas) in the country.

“In our country today, we do not produce AGO and we regret that our refineries are not working,” he said. “Are we doing anything about it? Yes. I have heard the honourable members lamenting; yes, they (the refineries) are not working.

“This is the truth. I don’t want to bore you with why they are not working, but they are not working; I admit they are not working but we regret it. I will invite this committee at your convenience to join us to see how much work we have done to get them back to work, but they will not come back tomorrow.

“They will not! You cannot start it tomorrow. We regret this; we regret this situation, and we are doing everything possible. As a matter of fact, we have decided to do a quick fix for the Warri refinery. The reason is very simple: we don’t even want to go the long route of doing comprehensive turnaround maintenance because we are concerned.”

The NNPC boss disclosed that Saudi Arabia’s Aramco recently bought a large amount of AGO and stockpiled it. “We were very surprised that Saudi Arabia would do this.

“No one knows what will come tomorrow. No one can guarantee the security of supply. That is why people are resorting to self-help. People are preserving the excess volumes that they have,” he said.

Mr Kyari, however, decried that Nigeria imports almost every commodity “perhaps, maybe with the exception of food.” He added that while the country does not export, it cannot have foreign exchange.

As a result, he believes the Central Bank of Nigeria (CBN) and the governor, Mr Godwin Emefiele, might not be able to provide forex intervention.

“There is a limit to what he (Emefiele) can do because as long as we are not productive, the only way you can cover FX gap is for you to go and borrow FX, and no one is going to lend you money to put on a subsidy; it does not happen anywhere in the world. No bank will lend you FX to go and put it into consumption.

“When Nigerians living in the diaspora used to be a very great source of forex. They can no longer send back because many of them are out of employment. So, they can no longer send money even to their parents. So, you cannot have it in your banking system,” he stated.

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Emirates Promises Nigerian MSMEs Attractive Incentives



Lending Options for MSMEs

By Modupe Gbadeyanka

Micro, Small and Medium-sized Enterprises (MSMEs) in Nigeria and other countries have been promised attractive incentives if they register for the Emirates Business Rewards programme.

The airline operator said the reward is for new members and part of the benefits include a joining bonus of 10,000 Emirates Business Reward Points – the equivalent of one Economy Class return ticket between most destinations in the Middle East, Africa/WAIO and Dubai, a city that offers world-leading support programmes and infrastructure for entrepreneurs and SMEs.

The offering by Emirates aims to support MSMEs and recognise the integral part they play in sustainable development, and the global economy and communities.

The company came up with this initiative as part of activities to mark the United Nations (UN) MSMEs Day and amplify the vital role these enterprises play in post-pandemic recovery.

There are currently more than 30,000 small businesses participating in the Emirates Business Rewards programme, taking advantage of a wealth of benefits including easy enrolment, accessible earning and redemptions, and flexibility and upgrade opportunities – even on last-minute bookings.

With a goal of ‘making business travel seamless’, Emirates Business Rewards enables organisations to earn points on business travel, which can be spent on future flights and upgrades on any Emirates flight, in any class, subject to availability.

Organisations are eligible to earn points whenever their employees or guest travellers fly on Emirates, which can then be spent on dynamic reward flights and upgrades.

Individuals can also earn Skywards Miles on the same flight if they are Emirates Skywards members. There’s no limit to how many employees can join the programme and no minimum spend is needed. Emirates Business Rewards is free to join and can offer a significant return to budget-conscious MSMEs.

SMEs are believed to account for over 70 per cent of total employment and 50 per cent of the gross domestic product (GDP).

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Skymark Energy Chief Urges Stakeholders to End Fuel Scarcity



Skymark Energy

By Adedapo Adesanya

The Chairman of Skymark Energy and Power Limited, Mr Muhammad Saleh-Hassan, has called on oil marketers and other stakeholders in the energy sector to cooperate with the federal government in order to end the biting fuel scarcity in Nigeria.

Speaking in Abuja, Mr Saleh-Hassan stressed that oil marketers have a major role to play in ending recurring fuel scarcity in the country, noting that the energy crisis appeared to have defied the government’s efforts and urged his colleagues to be patriotic by shunning sharp practices and putting the people’s interests above high profit-making targets.

”In this circumstance that we have found ourselves, the marketers and other stakeholders should be patriotic by supporting the government in the interest of the masses.

“A critical situation like this is not a time that we should be thinking of our personal interests and gains. We should also think of the interests of the nation and the people.

“This is because you rely on the people to do your business. So, they too need your support to be able to afford the services you are rendering to them.

“You also rely on the government for regulations to also do your business. That is why you should also support the government,” he said.

Mr Saleh-Hassan stated that it was morally wrong for oil markers, as critical stakeholders in the oil and gas sector, to be unpatriotic by aiding and abetting the energy crisis through sharp practices which caused fuel scarcity.

“You are not supposed to take advantage of the situation by insisting that you want to add transport costs or make more money by hoarding your products, sending them to the black market or diverting them to other destinations, where you think that you can make more gains.

“I, therefore, call on the marketers, particularly the Independent Petroleum Marketers’ Association of Nigeria (IPMAN), the Major Oil Marketers’ Association of Nigeria (MOMAN), and the Petroleum and Natural Gas Association of Nigeria (PENGASSAN), among others, to support the government in finding a lasting solution in the interest of the masses,” he said.

Mr Saleh-Hassan stressed that fuel subsidy, which will gulp about N4 trillion this year, had not failed.

According to the Skymark boss, sharp practices in the industry are responsible for sabotaging the integrity of subsidy, stressing that it was patriotism, and not fuel subsidy removal, that would solve the fuel scarcity problem, adding that removing subsidy would hit the economy badly.

“If you remove subsidy, it will hit the economy and aggravate the ailing economy and the masses will suffer seriously. There will be severe problems in the economic sector of the country. In fact, it would worsen the current inflation. Essential commodities in particular would not be affordable.

“President Buhari’s decision not to remove fuel subsidy is a kind and commendable gesture to the masses. As a leader, I think he is in the right direction. If patriotism is applied, you can be sure that the subsidy will work,” he said.

Speaking on why fuel depots were empty, in spite of the subsisting subsidy, he said: “The claim in the media circle that depots are empty is not true. Depots are not empty. If depots are empty, where are the independent marketers getting the product they are giving to the black marketers?

“After all, if NNPC imports the products, it gives it directly to the marketers to sell to people at stations at N165 per litre. Is a black marketer an independent marketer? Where do they get the fuel that they sell to people in gallons? he queried.

Mr Saleh-Hassan also said that it was necessary for the government to take more proactive measures to decisively address the fuel scarcity situation.

“The law has to work. We have to go back to the military era when petroleum products used to be escorted by security operatives from depots to the expected destinations to stop independent marketers from diverting them.

“At the point of discharging and distribution, all the trailers should be escorted by security agents to ensure that the products are delivered appropriately to the fuel stations.

“The police clamp down on fuel hawkers who were selling fuel in jerrycans in some parts of Abuja recently was a good move and I commend the IGP for that. This should continue until we see the end of the fuel crisis,” he said.

Mr Saleh-Hassan also called on Nigerians to be patient, adding that the crisis would soon be over as it was not peculiar to Nigeria, saying, “efforts are already being made by the Federal Government to reposition the oil sector.”

He said: “The ongoing Russia-Ukraine war has triggered economic woes across the globe and this is already trickling down on the energy sector in different countries in the world and Nigeria is no exception.

“Globally, refineries are not working. Even in America. About two or three weeks ago, there was fuel scarcity in London.

“Prices of refined products in the United Kingdom and United States (US) are not stable. In the US, a gallon of fuel is almost hitting $8. In the UK, to fill a car tank now is about 100 pounds.

“But in Nigeria, the official price is still N165 per litre. So, Mele Kyari, the NNPC GMD, is doing very well and should be commended.”

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