Three agencies in charge of the Nigerian capital market – Securities and Exchange Commission (SEC), Nigerian Stock Exchange (NSE) and Central Securities Clearing System (CSCS) – earned N9.360 billion from equity sales in 2013 an investigation revealed.
Daily Trust gathered that the SEC got 0.3 per cent of total value of equity sales by the shareholder (seller) as commission, NSE received 0.3 per cent of total value of equity buying by the shareholder (buyer) as commission apart from value added tax while the CSCS which facilitates the delivery (transfer of shares from seller to buyer) and settlement (payment of shares) of securities transacted on the floor of the NSE received 0.3 per cent of total value of equity buying by the shareholder (from buyer) as commission aside value added tax.
The stock market recorded an increase in the value of shares traded (turnover) in 2013 up 58.66 per cent to N1.04 trillion, and significantly higher than the 3.67 per cent reported for 2012.
Average daily turnover was up 57.36 per cent, and as at November 2013, 49.06 per cent of all market activity was by local investors. Based on the information gathered by Daily Trust, SEC received N3.12 billion from equity sellers in 2013, the NSE received N3.12 billion from equity buyers in 2013 and CSCS received N3.12 billion from equity buyers in same year.
Apart from the commission received form equity transactions, there are other ways through which SEC, NSE and CSCS generate money. Some of the key revenue sources for SEC are fees on government bonds and debentures of public limited companies; processing fees for schemes of merger/acquisition and takeover as well as fines and penalties.
SEC is also entitled to application fees for registration of a collective investment scheme at a flat rate of N35,000; filing fee for registration of securities at a flat rate of N10,000; registration fees of securities of public companies (including rights issue); special funds; and processing fees on offer for sale. Also, the NSE generates money from listing fees, broker/dealer fees, fines among others.
The NSE had early this year said that in carrying out its regulatory oversight in 2013, it handed out fines worth N104.7 million.
According to the NSE, the figure represented the combination of fines handed out to quoted companies and brokers. It also said sanctions had been imposed on companies that filed their financial statements for 2011 and 2012 in 2013, after the regulatory due date.
It added that the sanctions were in accordance with the provisions of its listing rules.
The Chief Executive Officer of NSE, Oscar Onyema, explained that the entire figure at the end of the year was higher.
He said in 2013, fines imposed on companies by the NSE amounted to N61.2 million, while those imposed on brokers for market infractions was N43.5 million.
“Regulatory oversight of companies have actually increased, not decreased,” he said, adding that the figures showed that the NSE was taking infractions seriously.
Source: Daily Trust (by Kayode Ogunwale)
