Yesterday, the Nigerian Stock Exchange (NSE) completed its long-awaited demutualization after getting the approval of the Securities and Exchange Commission (SEC) and Corporate Affairs Commission (CAC). The demutualization exercise is expected to produce a new non-operating holding company with three operating subsidiaries. The subsidiaries are Nigerian Exchange Limited (NGX), NGX Regulation Limited (NGX REGCO), and NGX Real Estate Limited (NGX RELCO), saddled with operating, regulating, and acting as the real estate arms of the Exchange, respectively.
The Nigerian Stock Exchange (Formerly Lagos Stock Exchange) was founded on the 15 September 1960 and began operations on 25 August 1961. In a bid to catch up with the needed efficiency to take its place as the leading Exchange on the African continent, members had agreed at an Extra-ordinary General Meeting in 2017 to demutualize the Exchange. A decision that became more pronounced as the demutualization bill became law in August 2018. Demutualizing the Exchange changed it from its earlier status as a non-profit organization limited by guarantee into a public company.
According to the Group Chief Executive Officer, Mr Oscar Onyema, 'The Nigerian capital market should play a role commensurate with Nigeria's status as Africa's largest economy. At the Nigerian Stock Exchange, we have a vision that the new Group will become the premier exchange hub for Nigerian businesses and for the African economy. We are implementing a series of measures towards this goal, demutualization being a critical milestone. The completion of demutualization is a truly significant moment, and we welcome the new possibilities that have opened up for us today.'
In our view, the exercise will provide an avenue for the Exchange to achieve greater efficiency in all its core activity areas. The Group's listing on the Exchange makes the current ownership stakes tradable while also providing an avenue for Capital (Equity or Debt) raise should the company need financing. Furthermore, the Group's incorporation would subject it to more public scrutiny, a factor that we expect would engender better corporate governance and better reporting standards. The company plans to invest in the necessary infrastructure to lower trading cost, improve real-time access to deals matching and reduce system downtime.
1. NSE Completes Demutualisation, SEC and CAC Approve - Mar 10, 2021
3. Demutualisation: NSE Announces Chief Executives for Emerging Entities - Jan 06, 2021
5. NSE Members Assent to Demutualisation Resolutions at COM and EGM - May 03, 2020
6. NSE Set to Hold Strategic Meetings As Demutualization Nears Completion - Feb 12, 2020
8. NSE Demutualisation Crosses Major Hurdle As Buhari Signs Bill - Sep 27, 2018
10. Members Approved NSE Demutualisation Process - Mar 30, 2017
11. NSE Announces Financial Advisers for Demutualisation - Oct 13, 2015
12. Brokers call on SEC board to publish guidelines for demutualisation - Mar 05, 2013
13. Demutualisation of NSE may begin in Q2 - Mar 01, 2012
14. SEC Inaugurates NSE's Demutualisation Committee - Sep 23, 2011
15. ASHON writes SEC on Council Members, Demutualisation - Apr 13, 2011
16. NSE restructures ahead of demutualisation plans - Mar 11, 2011
17. Why a return to demutualisation would be a great relief - May 20, 2010
19. NSE Demutualisation to be Concluded in 2012 - Sep 28, 2010
20. NSE DG leaves office November 2010, suspends demutualisation - Nov, 2010
21. Shareholder leader query NSEs proposed demutualisation - Jan 19, 2009