By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-The Nigerian stock exchange (NSE) Wednesday said filling financial statements before corporate action could lead to negative reaction as the market operators will not be aware that the company will declare dividends and or issue bonuses at a future date.
The NSE in a statement by Nwando Ajene, head/corporate communication and made available to InvestAdvocate said when such information is finally released it may adversely affect investors as decisions have already been taken based on the released financials.
According to the Nigeria’s exchange, the market reacts to any information that is released on financial reporting disclosure such as rendition of forecasts, interim accounts – Q1, Q2, Q3 financial statements, audited year-end financials and other price sensitive information such as acquisition, merger and changes on directorate etc.
It therefore advised quoted companies to file corporate action before financial statements or along with the financial statements of the relevant period.
Tinuade Awe, head, legal and regulation at the Nigerian bourse said over the years, the Nigerian bourse has required entities that intend to declare dividends and or issue bonuses (corporate actions) to file information regarding such corporate actions with the relevant financial statements. (Interim or year-end dividend/bonus are to be accompanied with interim/year-end accounts).
However, the NSE affirmed that the practice of submitting corporate actions with the accompanying financials has been very effective for the companies listed on the stock exchange. ‘’This is in line with the bourse’s efforts of aligning with global best practices which entails all listed entities to submit their financial statements as and when due and in submitting the financial statements, the entities are expected to give detailed information especially on corporate actions,’’ the Nigeria’s exchange said.
Awe said the practice became effective and enforced with the introduction of the first ever issuers’ portal in the Nigerian capital market styled as X-Issuer. ‘’The issuers’ portal was formally launched in early 2013 as one of a number of new regulatory initiatives of nation’s stock exchange developed to permit issuers to submit their information online, thereby enhancing interaction between the bourse and listed companies,’’ Awe said.
The head, legal and regulation at the NSE further affirmed that “X-Issuer has consistently offered unique benefits of data capture, form submission validation and other ancillary services such as submission notification mechanisms and tracking of submitted information. ‘’With this, Issuers are no longer required to submit hard copies of information to NSE by post, hand delivery or courier” she said.
She said because the X-Issuer is a secure online portal through which issuers have been submitting financial and other information to the exchange and the market from the comfort of their offices, ‘’it has not only encouraged transparency and accountability but has expedited the discharge of Issuers’ post-listings obligations relating to structured and continuous disclosures. This has eliminated leakage of price sensitive information because of the minimal time between submission by the Issuer and release to the market,” Awe affirmed.
‘’Indeed, X-Issuer does not accept the uploading of financial statements by issuers before their corporate action information; however corporate actions can be filed before the financial statements. Filing of corporate action information alone does not qualify a listed entity as having submitted the financial statements for the relevant period,’’ the NSE head, legal and regulation said.
