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Tuesday, August 07, 2018 /11:33 AM / SEC
New Rule
1. Proposed Rules on Nominee Companies
Major Amendment
2.
Proposed
amendment to Rules on Collective Investment Schemes Sundry Amendments
3.
Proposed
amendment to the Rule 45 (Part C) – Registrable Functions
4.
Proposed
amendment to Rule 51- Reports to be Filed/Schedule II (Penalties)
5.
Proposed
amendment to Rule 57- Net Capital Requirement
6.
Proposed
amendment to Rule 58- Determination of Net (Liquid) Capital
7.
Proposed
amendment to Rule 125- Prohibition of Assignment
8.
Proposed
creation of New Rule under Part C13- Right of Investor to appoint Custodian
9.
Proposed
amendment to Rule 132- Use of Nominees
10. Proposed amendment to Schedule I- Registration Fees, Minimum Capital Requirement, Securities & Others
Details of the proposals are as follows:
New
Rule
Proposed Rules on Nominee Companies in the Nigerian Capital Market
1. Definition of Terms
Nominee
A Nominee is a company formed by a bank or other financial institution for the purpose of holding securities and other assets and administering them on behalf of the actual owners under the terms of a custodial or nominee agreement.
Holding Company: Means a bank or other eligible financial institution that owns and controls a Nominee.
Client:
Means a
person who has entered into agreement with a Nominee to hold and manage its
securities or other assets.
2. Business of the
Nominee Companies
i. The business of the
Nominee shall be to take title of property, money or securities in trust for
and on behalf of clients as nominee for, or representative of such clients, to
hold and deal with such property, money or securities strictly in accordance
with any directions given by the respective clients from time to time to the
Nominee.
ii. A nominee shall not
engage in any business or activity except the business of nominee companies
described above
3. Functions of Nominee
i.
Maintaining
accounts of securities of clients
ii.
Collecting
all rights and benefits on behalf of, or accruing to clients in respect of
securities held
iii.
Managing
the holding of clients including facilitating sale, purchase, lending and
borrowing securities and settlement of investment obligations based on the
clients’ mandates
iv.
ensuring
compliance with contractual obligations with clients and custodians v. maintaining
and reconciling records of the services referred to in sub-clauses (i) to (iv)
above;
v.
Maintaining
sufficient information and record to identify the beneficial owners of
securities held by it.
vi.
Providing
periodic information to clients and custodians (where securities and other
assets are transferred to the nominee by custodian).
4. Dealing with assets
of clients
The Nominee shall deal
with the assets that it holds on behalf of clients including custodians as
follows:
a) Securities
i)
Securities
as defined in the Investments and Securities Act (ISA) 2007 shall be registered
in the name of the Nominee or in the name of Nominee and client
ii)
Securities
shall be stored and held in safe and secure custody or electronically
administered and maintained and shall be protected by adequate and appropriate
security and administrative systems.
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