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Monday,
May 13, 2019 10:40AM / By SEC Nigeria
All
comments and input should be forwarded by e-mail to the Secretariat, Rules
Committee of the Commission, at rulescommittee@sec.gov.ng or
by letter addressed to the Director-General, SEC, not later than two (2) weeks
from date of publication.
Sundry
Amendments
Details of the proposals are as follows:
Proposed
Amendment to Rule 42 – Half-Yearly Returns
Full Text of the Existing Rule 42:
Companies
shall notify the Commission in writing immediately the following events occur:
Proposed amendment: Creation of Sub-rule 190 (3) as follows:
Public
companies shall disclose the following minimum corporate governance information
on their websites.
SECTION
A – GOVERNANCE STRUCTURE
SECTION B – THE BOARD
The
composition and structure of the Board shall consist of the following
information:
A
tabular representation of the profile of Directors containing the following:
A
tabular representation of Board’s Committee comprising the following
information:
A
tabular representation of the information is to be disclosed under the
following headings:
Board
Meetings
Board
Committee Meetings
SECTION
C – SHAREHOLDING AND DIVIDEND ANALYSIS
This
section should provide specific information on shareholders holding 5% or more
of the issued and fully paid share capital of the Company as at the end of the
financial year and should disclose the following:
The interest of all Directors (and persons connected with them) in the share capital of the Company as at the financial year end should be disclosed under the following he
adings:
SECTION
D – OTHER GOVERNANCE PROCESS
In
keeping to the highest standard of governance, Companies would be required to
disclose detailed information as it relates to:
JUSTIFICATION
As part of the Corporate Governance Scorecard implementation strategy, companies are expected to disclose a Minimum Corporate Governance Report on their websites. The information is expected to be structured to contain reasonable Corporate Governance information on the public companies.
Proposed
Amendment To Rule 67(2)- Re-Instatement Of Individual Sub-Broker Function
Full
text of existing Rule 67 (2):
(2) Individual Sub-Broker
(a) An application for registration as an individual
sub-broker shall be filed on Form SEC 2 as provided in schedule III of these
rules and regulations and shall be accompanied by the following:
(i) Certified copy of certificate of
registration of business name (where
applicable);
(ii) Evidence of minimum net worth of N500,000;
(iii) Sworn undertaking to comply with the
provisions of the Act and the rules and
regulations as may be required from time to time by the Commission;
(iv) Evidence of compliance with rule 20(4);
(v) Sworn undertaking to keep proper records
and render returns.
(b) Rule 83(3) and (4) shall, with all necessary
modifications, apply in case of denial or suspension of registration of a
sub-broker.
Justification
The
deletion of Rule 67 (2) in November 2017 generated a lot of comments from the
Nigerian Stock Exchange (NSE) and Association of Stock Broking Houses (ASHON),
who thereafter requested for the reinstatement of the function. The Rules
Committee revisited the issue and the Commission agrees that reinstatement of
Individual Sub – broker function will help in enhancing financial inclusion,
deepening the market, and attracting more retail investors as well as enable
the Sub – brokers have more presence at the grass root level.
Proposed
Amendment To Part N Rule 602- Miscellaneous Rules
Full
text of existing Part N Rule 602:
Attendance
at General Meetings of Securities Exchanges/other S.R.O.s, public companies,
collective investment schemes, court–ordered meetings in mergers and
take-overs.
Proposed
amendment: Creation of Sub-rule 4 and 5 as follows:
Any
company that violates the provisions of (4) and (5) above shall be liable to a
penalty of not less than N10,000,000 (Ten million naira only).
Justification
Public
companies spend a significant amount of money on corporate gifts at AGMs/EGMs
and this has a great impact on their profitability. Few of the companies are
making reasonable profits and even fewer can afford to pay dividends. If the
amount budgeted for gifts at AGMs/EGMs can be reserved for other relevant
operational or administrative expenses, it would positively impact on their
earnings per share.
Furthermore,
it has been observed that some companies arrange meetings with select groups of
shareholders ahead of general meetings to discuss proposed resolutions and
agree on strategies which are often detrimental to the interest of other
shareholders.
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