SEC Introduces Changes To Filing Of Consent Letters and Executed Offer Document

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Wednesday, February 20 2019  12:50 PM / by SEC Nigeria


Summary
The Securities and Exchange Commission has introduced changes to the practice of:

  • filing consent letters at the commencement of a transaction;
  • the execution of advert materials and specimen evidence of allotment by all parties; and
  • the mode of execution and Issuance of consent letters by Sub-national Issuers.


Full Text

i.   Consent Letters– Further to deliberations with the Association of Issuing Houses of Nigeria (AIHN) and in a bid to accommodate changes which may be made to the terms of a proposed transaction prior to approval, the Commission resolved to introduce some flexibility to the timing for filing consent letters with the Commission.

With effect from the Effective Date, Consent letters of every person who consents to be named in the offer document or other document(s) in connection with a proposed offer, may now be filed either at the initial stage of a transaction or at the point of filing executed offer documents.
In giving effect to the foregoing, Issuing Houses are to note the following;

  • The flexibility does not serve as an exemption to the complete filing directive of the Commission;
  • This directive does not permit filing of consent letters in batches;
  • All consent letters are expected to be filed in one complete batch at the initial point of filing the transaction or at the point of filing the executed offer documents;
  • All issuers and Issuing Houses are to note that Filing of consent letters at the point of filing executed offer documents will not preclude the identification of deficiencies which may delay the approval of the transaction;
  • Issuing Houses are to ensure that all consent letters appropriately describe the transaction, indicate in what capacity the person giving consent has agreed to be named in the offer document and other related documents, are signed in wet ink by the named signatory (ies) and be duly notarized by a Notary Public;
  • Consent letters shall not be notarized by a person who is also a named signatory on the consent letter;
  • Scans, photocopies or consent letters with electronic signatures are not acceptable.


ii.   Execution of Advertisement materials and Specimen Documents: As part of efforts to ease regulatory requirements by eliminating processes which unduly prolong the issuance process, the Commission resolved to dispense with the practice of having all advert materials and specimen certificates or e-allotment notices, executed by all parties to the transaction.

With effect from the Effective Date;

  • The Commission will no longer require executed advert materials where the offer is by book building with no retail tranche;
  • For other types of offers, all advertisement materials and specimen document (certificate or e-llotment advice) are to be executed only by the Issuing House(s).

iii. Sub-national Issuers – Consent Letters and Execution of Offer Documents: The Commission has evaluated the practice of having all members of a State Cabinet consent to be named in the offer document and execute the prospectus and considers this practice unduly burdensome and not in line with the accountability structure of sub-national governments.

With effect from the effective date and without prejudice to the requirements for sub-national issuances as contained in the law as well as the rules and regulations of the Commission, the offer document for sub-national issuances shall only name and be executed by the Governor, the Commissioner for Finance, the Accountant-General and the Attorney-General of the State.

Consequently, consent letters shall only be required from the Governor, Commissioner for Finance, Accountant-General and the Attorney-General of the State.

Effective Date: February 18, 2019

Enquiries or requests for clarification regarding any of the foregoing should be directed to offerapplications@sec.gov.ng


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