Continuous improvement in the market sustained amidst regulatory breeze – Aug’ 14 SSS Report


Thursday, September 04, 2014 9.58 PM /

The continuous development and improvements witnessed since the beginning of the current year took a breather as market operators took time to take in the deluge of regulations coming from the SEC in the month.

Market operators, more importantly brokerages firms however still followed through with the trend to introduce new products/service as CSL Stockbrokers Ltd launched the Interswitch Payment Solution on its portal for easy transfer payment(s). The wait for the introduction of new online trading platforms continued and we expect that next month will deliver on that. Primary market activities, which remains one of the easiest ways to gauge how healthy a market is - continues to witness less or zero IPO’s but increasingly more recourse to the rights issue market.


The regulators, on their part have taken a series of actions that should in the main, support an industry wide consensus on market development and adherence to best practice. Whilst the more contentious issues remain a matter for further resolutions, the more immediate issues related to the December 31, 2014 deadline seems to have somewhat been relegated from the front pages…..

There are those who believe that with the introduction of the e-dividend and CSCS restructuring that the incidence of unclaimed dividends should have been reduced significantly. A wider group is of the view that there are gaps in the laws that relate to the 12 year rule for shareholders to claim their funds without any specific claim on what happens to the funds thereafter. Be that as it may, and while we work as a market to resolve that, the issue of issuing directives was not envisaged by the ISA Act and as such should not be a feature of the market. The response from stakeholders so far has been therefore consistent with best practice and it is hoped that the legal proceedings arising therefrom would help strengthen the regulatory environment.


Yet, in this season, the capital market registrars got what most would have termed a resolution mandate from the Securities & Exchange Commission (SEC) through its directive that all dividends that have spent fifteen (15) months and above within the confines of Registrars be moved back to the company paying the dividend not later than Friday 29th August, 2014. Suffice to say,  question remains whether or not this should be a binding rule, as the law (which remains unchanged) made by the Company and Allied Matters Act (CAMA 1990) allowed for 12 years recoverable period of dividend by shareholders from the Registrars, while both the Investment & Securities Act, 2007 and The Securities & Exchange Commission Rules and Regulation, 2013 in their own laws were both silent on what ‘Unclaimed Dividends’ are and when a ‘Dividend’ becomes unclaimed.


Meanwhile, the Exchange is on the verge of producing a rule for the creation of the Premium Board of The Exchange for an elite group of issuers which are expected to meet stringent corporate governance, capitalization and liquidity conditions before they are listed on the proposed board. In partnership with The Convention on Business Integrity also, the Exchange has developed a Corporate Governance Rating System (CGRS) for Nigeria, which is in a pilot stage while the results of the pilot and announcement of the mandatory roll out of the CGRS to all listed companies is set to be made later in September, 2014.


In all, the August 2014 SSS Quality Report is a snapshot and aide memoire of these developments as we keep tracking milestones that the investing public should be aware of. Do feel free to share your opinions/observations and feedback with us vide


Thank you.


For: Analyst Editorial Board



CEO, The Analyst


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