The Securities and Exchange Commission has said the demutualisation of the Nigerian Stock Exchange will be done in a transparent manner.

Demutualisation is a process whereby stock exchanges transform into Public Limited Liability Company, and by implication a profit-making organisation listed on itself and any other Exchange around the world.

The Director-General, SEC, Ms. Arunma Oteh, who stated this at a news conference in Lagos on Thursday, explained the process would be transparent to enable the owners of the Exchange get real value on investment at the end of the exercise.

She said the demutualisation was essential to the future of the Exchange, and therefore, it was important for the process to be carried out in a manner that would allow stakeholders to have confidence in the system.

Following the exercise, the investing public will have the opportunity to trade on the shares of the Exchange just like any other quoted company. Where it is implemented, the exercise usually results into members of the public holding 51 per cent of the demutualised company’s equity capital.

Oteh assured operators and players in the market that the guidelines on the planned demutualisation had been forwarded to the Ministry of Finance, adding that it would be reviewed to ensure that public interest was protected.

She said, “We agree about the importance of demutualisation to Nigerians and that is why we started early on the issue. In 2011, we set up an industry committee on demutualisation who did an excellent work and presented the report to the board.

“We also consulted with the Deputy Chief Executive Officer of the Toronto Stock Exchange to work with us in developing guidelines and the board considered it and we submitted to the Ministry of Finance.

She added, “I believe that the ministry of finance is reviewing it to make sure that public interest is not affected by the issue and that is why they are being diligent and taking their time to consider these issues. I also believe that government is aware of the importance of public interest and that is why they are taking time to review this issue and the guideline we submitted to the ministry of finance is not just focused on NSE but guideline that can be used for any other demutualisation work anytime.”

Oteh further explained, “Our position is that if there will be demutualisation exercise, let it be that the owners real value and the Exchange that was inherited in 2010 is not the exchange today. It would bring more value to the owners than it would have brought before.”

Source: Punch (by Udeme Ekwere)