Thursday, January 29, 2015 12.27PM/SEC
Proposed sundry amendments to the Commission’s rules and regulations be exposed to stakeholders/general public for comments and input:
All comments and input should be forwarded to the Secretariat, Rules Committee of the Commission, via, firstname.lastname@example.org or through the DG, SEC, two (2) weeks from the date of publication.
A. Proposed rules on return of unclaimed dividends to paying companies
B. Inclusion of Independent National Electoral Commission (INEC) voter’s registration card as a valid means of identification of individual clients in the Capital Market.
C. Proposed amendments to various SEC rules on capital market operations;
Rule 22(5),Rule 182(5), Rule 279(3)(3)(i), Rule 279(2)(r), Rule 279(2) (p), Rule 279(2)(d)(viii), Rule 300,Rule 314 ,Rule 312 (6)(i), Rule 315 (4),Rule 315 (4) (d),Rule 315 (7), Rule 316 (1),Rule 317 (2),Rule 340 (2) (e) ,Rule 420(1) and Rule 567(f).
D. Creation of new Form SEC 2D for fit and proper persons (sponsored individuals, directors/partners) for registration in the capital market.
Rule 312 (4) and Rule 340 (2) (h) are expunged.
(A) PROPOSED RULES ON RETURN OF UNCLAIMED DIVIDENDS TO PAYING COMPANIES
The proposed rule 108(b)(1-11) is hereby proposed to read as follows:-
Title : “Return of Dividends Unclaimed”
(1)“All unclaimed dividends in the custody of the Registrars shall be returned to the paying company twelve (12) months after the date of approval of dividends at a general meeting (for final dividends) or a board meeting (for interim dividends) and evidence of remittance forwarded to the Commission (SEC) within 24 hours”.
(2) “Where dividends are returned to the company unclaimed, the company may invest the unclaimed dividend for its own benefit in a guaranteed income investment outside the company and no interest shall accrue on the dividends against the company”.
(3) Unclaimed dividend shall not be used by the company for its own business except in accordance with provisions of CAMA.
(4) “The company may retain a minimum of 5% of the unclaimed dividends in cash or near-cash for the purpose of remittance to the Registrars upon request for payment”.
(5)“All accrued interests from the failure of Registrars to remit the unclaimed dividends within the time limit prescribed in these Rules and Regulations shall be remitted along with the unclaimed dividend to the paying company”.
(6) The accrued interest shall be calculated at a rate not below CBN treasury bills (TB) + 5%.
(7) “Failure to remit unclaimed dividends to the paying company by the Registrar as stated above shall attract a penalty of N5 million and an additional sum of N100, 000 for every day such contravention persists”.
(8) “The responsibility of paying dividends to a shareholder after the dividends have been returned to the company shall lie with the Registrar”.
(9) “Paying companies shall remit the portion of unclaimed dividends claimed by a shareholder(s) to the Registrar within 48 hours of receiving a request/claim for payment”.
(10) “Failure by the paying companies to comply with the above provision shall attract a penalty of N1 million in the first instance and N100, 000 for every day such contravention persists”.
(11) “Failure by the Registrars to comply with the above provision will attract a penalty of N2 million in the first instance and N500, 000 for every day such contravention persists”.
(B) PROPOSED INCLUSION OF INDEPENDENT NATIONAL ELECTORAL COMMISSION (INEC) VOTER’S REGISTRATION CARD AS A VALID MEANS OF IDENTIFICATION OF INDIVIDUAL CLIENTS IN THE CAPITAL MARKET
S 44 (4) of the Securities and Exchange Commission (Anti-Money Laundering and Combating the Financing of Terrorism) Regulations, 2013 lists suitable documentary evidence as means of identification. It is suggested that this sub-regulation be amended to include the INEC Voter’s Registration card.
S 44 (4) is hereby proposed to read as follows:-
“Suitable documentary evidence for Nigerian resident private individuals are –
a) personal identity documents –
i) current International Passport,
ii) Residence Permit issued by the Immigration authorities,
iii) current Driver’s Licence issued by the Federal Road Safety Commission (FRSC),
iv) Inland Revenue Tax Clearance Certificate,
v) birth Certificate or Sworn Declaration of Age,
vi) National Identity Card, and
vii) Voter’s Registration card issued by the Independent National Electoral Commission (INEC)”
C. SUNDRY AMENDMENTS TO SEC CAPITAL MARKET RULES ON OPERATIONS
1. AMENDMENT OF RULE 22 (MINIMUM PAID UP CAPITAL)
Creation of Rule 22 sub (5) to read as follows:- The Rule of minimum paid up capital to provide that where the minimum paid up capital or shareholders’ funds of a capital market operator falls below the minimum threshold, such operator shall shore up its minimum paid up capital or shareholders’ funds within three (3) months, failing which, the operator would be suspended from the capital market operations until compliance.
2. Rule 182 – (Regulation of Securities Exchanges and Transactions on Exchanges, Capital Trade Point and Other Self-Regulatory Organizations)
Creation of Rule 182 Sub (5) to read as follows:-
The Commission shall only consider an applications of fit and proper companies,and subsidiaries or promoted by any of the following categories, namely:-
a. Federal, state and local government or their agencies
b. Self-Regulatory organization (SRO), Registered or Recognized by a statutory financial regulator either in Nigeria or in other jurisdictions
c. A company Registered or Recognized by a statutory financial market regulator either in Nigeria or in other jurisdictions,
d. An association of reputable individuals who are either registered/recognized by a statutory financial market regulator in Nigeria or other jurisdictions.
3. Rule 279(3)(3)(i) (Shelf registration)
An amendment is recommended for this Rule to read as follows:
(3) Eligibility for use of the shelf registration
i)Unless otherwise indicated by the Commission, all entities qualified under the law for purposes of issuance of Municipal bond, Supranational institutions, SPVs, Public Companies (which have been listed on a securities exchange for a minimum period of twelve months) and such other entities other than Public unlisted Company covered under the Act are eligible to issue, offer for subscription or purchase, or issue an invitation to the public or a select few subscribers to purchase securities in accordance with a shelf registration.
4. Rule 279(2)(r)
(2) Registration Requirements
To be amended to include:
(r) rating report by a registered rating agency (applicable to a debt instrument)…the rating of the Issue and the Issuer shall be of Investment grade and shall be annually reviewed throughout the life of the bond.
5. Rule 279(2) (p)
(2) Registration Requirements
The rule should be amended to include:
(p) State government official gazette or local government by-law containing the instrument authorizing the issue of the bond (applicable to State and Local government bonds) and the relevant appropriation bill for the projects the bond proceeds will be used for.
6. Rule 279(2)(d)(viii) –( Registration Requirements for registrable securities)
To be amended by the addition of the following:
viii) The latest audited accounts shall not be more than nine months old for corporate bodies or twelve months old for States, Local and Federal Government Agencies and Supranational bodies. Provided that the latest audited account shall remain valid throughout the offer period.
(Applicable to both Equities and Debt Issue)
7. Rule 300 – (Pre-Offer waiting period (Fixed price offers)
There shall be at least one week pre-offer period before the opening of the offer. For the purpose of this rule, it shall be the period from the date of the execution of offer documents to the date an offer opens provided that where price is discovered through book building, this rule shall not apply.
To be amended by the addition of the following:
The Commission may at the instance of the issuer allow the offer to open even if they don’t observe the one week waiting period especially where the issuer’s latest audited account is about to become stale.
8. Rules 314 – (Cost of Issue)
The cost of issue shall not exceed 3.17% for equity and 3.9375% for bonds of the gross total proceeds, indemnity fee, advertisement, and printing and take on fees for registrars, from the issue or such percentage as the Commission may prescribe from time to time.