By InvestAdvocate

Lagos (INVESTADVOCATE)-The Nigeria’s Securities and Exchange Commission (SEC) has said it will henceforth sanction erring Issuing Houses and Issuers for failure to render quarterly returns on utilisation of issue proceeds.

This was contained in a Circular posted on the official website of the Commission.

“The Commission wishes to emphasize that responsibility for the rendition of returns is both that of the Issuer and the Issuing House. Henceforth the Commission will sanction both the Issuer and Issuing House for failure to render the statutory returns as and when due” the Circular said.

According to Nigeria’s SEC, this is inline with the provision of rule 65(2) of SEC Rules and Regulations which states that “the Issuer and the Issuing House shall file with the Commission not later than 90 days after the clearance of allotment reports on utilisation of proceeds of issue. This puts a joint responsibility on the Issuer and the Issuing House” the Commission said.

The Circular reads thus: “The Commission has noted that issuing houses to public offers do not do follow-up communication with issuers after the remittance of issue proceeds.

The Commission hereby reminds all issuing houses of the provision of rule 65(2) of SEC Rules and Regulations which states that “the issuer and the issuing house shall file with the Commission not later than 90 days after the clearance of allotment reports on utilization of proceeds of issue”. This puts a joint responsibility on the issuer and the issuing house.

This circular has become necessary in view of the observed failure/refusal of some issuers to render quarterly returns on utilization of issue proceeds.

The Commission wishes to emphasize that responsibility for the rendition of returns is both that of the issuer and the issuing house. Henceforth the Commission will sanction both the issuer and issuing house for failure to render the statutory returns as and when due”.

This is coming on the heels of the placing on full suspension 24 Companies by the Nigerian Stock Exchange (NSE) on Tuesday August 02 2011 for non-rendition of their Financial Accounts. Prior to this, 48 Firms were placed on technical suspension on July 01 2011, and out which 24 of them had submitted their account statements and the technical suspension lifted.

Non-submission of accounts when due is a violation of the Post-Listing Rules of The Exchange as contained in Key Issue No. 5 (Annual Accounts Procedures), which states that audited annual accounts of companies ought to be submitted within three months of the year end.