14/3/2017/SEC
All comments should be forwarded to rulescommittee@sec.gov.ng or through the DG, SEC not later than two (2) weeks from the date of this publication.
EXPOSURE OF PROPOSED NEW RULE AND SUNDRY AMENDMENTS TO THE RULES AND REGULATIONS OF THE COMMISSION
(a) Proposed Fixed Income Primary Issuance Fees
(b) Proposed Equity Primary Issuance Fees
Sundry Amendments
(c) Proposed
amendment to Rule 314- Cost of Issue
(d) Proposed amendment to Rule 456 (f)- Rules on Obligations of the Custodian of a Collective Investment Scheme
(e) Proposed amendment to Schedule I of the Commission’s Rules and Regulations-Registration Fees, Minimum Capital Requirements, Securities and Others
(f) Proposed amendment to Schedule VI- Basis of Computation of Bid and Offer Prices for Collective Investment Schemes
(g) Proposed amendment to Rule on Trading in Unlisted Securities- Inclusion of Debt Securities
- PROPOSED
FIXED INCOME PRIMARY ISSUANCE FEES
| S/N | Cost Centre | CURRENT FEE RATES | Proposed fee Rates | ||||
| 1 | SEC | @ 0.15% of offer size | 1st N500 Mn @ 0.15% | ||||
| Next N500 Mn @ 0.145% | |||||||
| Balance above N1 Bn @ 0.1425% | |||||||
| 2 | NSE | @ 0.15% of offer size | Companies already having Equity Listing @ 0% | ||||
| Companies not having Equity Listing @ 0.0375% | |||||||
| States and Supra-nationals @ 0.05% | |||||||
| 3 | ISSUING HOUSE | Max 1.35% of offer size | 1ST N1 Bn @ Max of 1.35% | ||||
| Next N1 Bn @ Max of 1.225% | |||||||
| Balance above N2 Bn @Max of 1.15% | |||||||
| 4 | CSCS | @ 0.01% of Offer size | @ 0.0075% of Offer Size | ||||
| Capped @ N5 Mn | |||||||
| 5 | RECEIVING AGENT | @ 0.75% of Offer size | @ 0.25% of Offer size | ||||
| 6 | STOCKBROKER | @ 0.13% of Offer size | @ 0.13% of Offer size | ||||
| 7 | REGISTRARS | N30 (Existing Application) | N30 (Existing Application) | ||||
| N40 (New Application) | N40 (New Application) | ||||||
| Take on fee of N1 Mn | Take on fee of N1 Mn | ||||||
| 8 | SOLICITOR TO THE ISSUE | @ 0.1% of Offer size | @ 0.05% of Offer size | ||||
| Subject to a min of N1 Mn | Subject to a cap of N10 Mn | ||||||
| 9 | SOLICITOR TO THE COMPANY | @ 0.05% of Offer size | @ 0.01% of Offer size | ||||
| Subject to a min of N500,000 | Subject to a cap of N5 Mn | ||||||
| 10 | REPORTING ACCOUNTANT | @ 0.1% of Offer size | @ 0.05% of Offer size | ||||
| Subject to a min of N1 Mn | |||||||
| Subject to a max of N7.5 Mn | |||||||
| 11 | AUDITORS | @ 0.05% of Offer size | @ 0.01% of Offer size | ||||
| cap of N4 Mn | |||||||
| 12 | TRUSTEES | 0.1% – 0.35% Of Offer size | Max of 0.035% of Offer size | ||||
| Cap of N5 Mn | |||||||
| 13 | UNDERWRITING | Negotiable (Excluded from current fee regime) | Max of 2.3% of Offer size | ||||
| 14 | PRINTING/ | (Excluded from current fee regime) | Max of 0.2% of Offer size | ||||
| ADVERTISEMENT/PUBLICITY/OTHER | |||||||
| EXPENSES | |||||||
| TOTAL | MAX 3.9375% (excluding underwriting commission, Printing/Adverts and Registrars fee ) | Max 2.293% (excluding underwriting commission and Registrars fee ) | |||||
- PROPOSED
EQUITY PRIMARY ISSUANCE FEES
| S/N | Cost Centre | CURRENT FEE RATES | PROPOSED FEE RATES | ||||||
| 1 | SEC | 1st N500 Mn @ 0.30% | 1st N500 Mn @ 0.275% | ||||||
| Next N500 Mn @ 0.225% | Next N500 Mn @ 0.225% | ||||||||
| Balance above N1 Bn @ 0.15% | Balance above N1 Bn @ 0.15% | ||||||||
| 2 | NSE | At 0.30% of Offer size | Main Board – Listing Fees – 0.25% of Offer size subject to maximum fee of N200m. | ||||||
| Premium Board – Listing Fees 0.25% of Offer size subject to maximum fee of N400m. | |||||||||
| ASEM – flat fee of N100,000.00. | |||||||||
| 3 | ISSUING HOUSE | At 1.35% of Offer size | 1ST N1 Bn @ 1.35% | ||||||
| Next N1 Bn @ 1.225% | |||||||||
| Balance over N2 Bn @ 1.15% | |||||||||
| 4 | CSCS | At 0.01% of Offer size | At 0.0075% of Offer Size | ||||||
| Capped @ N5 Mn | |||||||||
| 5 | RECEIVING AGENT | At 0.75% of Offer size | @ 0.50% of Offer Size | ||||||
| 6 | STOCKBROKER | 0.13% of Offer size | 0.13% of Offer Size | ||||||
| 7 | REGISTRARS | N30 (Existing Application) | N30 (Existing Application) | ||||||
| N40 (New Application) | N40 (New Application) | ||||||||
| Take on fee @ N1m | Take on fee @ N1m | ||||||||
| 8 | SOLICITOR TO THE ISSUE | At 0.1% of Offer size | 0.05% of Offer Size | ||||||
| Subject to a min of N1 Mn | Subject to a min of N1 Mn | ||||||||
| Capped at N10Mn | |||||||||
| 9 | SOLICITOR TO THE COMPANY | At 0.05% of Offer size | At 0.01% of Offer Size | ||||||
| Subject to a min of N500,000 | Subject to a min of N500,000 | ||||||||
| Capped at N5Mn | |||||||||
| 10 | REPORTING ACCOUNTANT | At 0.1% of Offer size | 0.05% of Offer Size | ||||||
| Subject to a min of N1 Mn and a max of N7.5 Mn | |||||||||
| 11 | AUDITORS | At 0.05% of Offer size | At 0.01% of Offer size capped @ N4 Mn | ||||||
| 12 | UNDERWRITING | Negotiable (Excluded from current fee regime) | Max of 2.3% of Offer size | ||||||
| 13 | PRINTING/ | (Excluded from current fee regime) | Max of 0.2% of Offer size | ||||||
| ADVERTISEMENT/PUBLICITY/OTHER | |||||||||
| EXPENSES | |||||||||
| TOTAL | MAX 3.17% (excluding underwriting commission, Printing/Adverts and Registrars fee ) | Max 2.833 % (excluding underwriting commission and Registrars fee ) | |||||||
- PROPOSED AMENDMENT TO RULE 314- COST OF ISSUE
Existing
Rule:
The total cost of issue shall not exceed 3.17% for equity transactions and 3.9375% for bonds of the gross total proceeds, excluding indemnity fee, advertisement, printing and take on fees for registrars, from the issue or such percentage as the Commission may prescribe from time to time.
Proposed Amendment:
“The total cost of issue shall not exceed 2.833% for equity and 2.293% for bonds of the total gross proceeds excluding underwriting commission and registrars’ fees from the issue or such percentage of the gross
total proceeds as the Commission may prescribe from time to time”.
- PROPOSED AMENDMENT TO RULE 456 (F)- OBLIGATIONS OF THE CUSTODIAN OF A COLLECTIVE INVESTMENT SCHEME
Existing Rule 456 (f):
The Custodian shall:
Be independent of a scheme’s fund manager, and not be affiliated to either of the parties.
Proposed amendment:
Be independent of a scheme’s fund manager.
- PROPOSED AMENDMENT TO SCHEDULE I OF THE
COMMISSION’S RULES AND REGULATIONS-REGISTRATION FEES, MINIMUM CAPITAL
REQUIREMENTS, SECURITIES AND OTHERS
The following amendment is proposed to Schedule I to break up the Registration fee into 3 components: Filing fees, Processing fees and Registration fees.
| S/N | CATEGORY | CURRENT FEES =N= | PROPOSED FEES =N= |
| 1 | Filing fee for all categories | 5,000.00 | 50,000.00 |
| 2 | Processing fee for all categories | N/A | 200,000.00 |
The following amendment is proposed to categorise market participants by
registration threshold.
| S/N | TYPES OF FUNCTION | CURRENT REGISTRATION FEES =N= | PROPOSED REGISTRATION FEES =N= |
| 1. | Stock/Commodities Exchange | 100,000.00 | 1,000,000.00 |
| 2. | Over the Counter Market | N/A | 1,000,000.00 |
| 3. | Clearing & Settlement Agency/Depository Agency | 100,000.00 | 1,000,000.00 |
| 4. | Bankers to an Issue | 100,000.00 | 1,000,000.00 |
| 5. | Issuing House | 200,000.00 | 500,000.00 |
| 6. | Broker/Dealer | 100,000.00 | 500,000.00 |
| 7. | Registrar | 100,000.00 | 500,000.00 |
| 8. | Trustee | 100,000.00 | 500,000.00 |
| 9. | Registrar | 100,000.00 | 500,000.00 |
| 10. | Fund Manager | 100,000.00 | 500,000.00 |
| 11. | Underwriter | 200,000.00 | 500,000.00 |
| 12. | Market Maker | 200,000.00 | 500,000.00 |
| 13. | Inter Broker/Dealer | N/A | 500,000.00 |
| 14. | Custodian of Securities | 200,000.00 | 500,000.00 |
| 15. | Capital Trade Point | N/A | 500,000.00 |
| 16. | Broker | 100,000.00 | 300,000.00 |
| 17. | Dealer | 100,000.00 | 300,000.00 |
| 18. | Rating Agency | 100,000.00 | 300,000.00 |
| 19. | Capital Market Consultants (Corporate) | 100, 000.00 | 300,000.00 |
| 20. | Capital Market Consultants (Partnership) | 50,000.00 | 300,000.00 |
| 21. | Corporate Investment Adviser | 100,000.00 | 300,000.00 |
| 22. | Sub-broker | 50,000.00 | 200,000.00 |
| 23. | Individual Investment Adviser | 50,000.00 | 200,000.00 |
| 24. | Capital Market Consultants (Individual) | 20,000.00 | 200,000.00 |
| 25. | Sponsored Individual | 10,000.00 | 50,000.00 |
- PROPOSED AMENDMENT TO SCHEDULE
VI-BASIS OF COMPUTATION OF BID AND OFFER PRICES FOR COLLECTIVE INVESTMENT
SCHEMES
1.1 Existing Schedule VI:
The bid and offer prices of units in a collective investment scheme shall be based on the net asset value of the
scheme calculated on a weekly basis by the scheme manager….
Proposed Amendment:
The bid and offer prices of units in an open-ended collective investment scheme shall be based on the net asset value of the scheme calculated on a daily basis by the scheme’s manager…
1.2 Existing Note at end of Schedule VI:
Securities traded on a Stock Exchange or any regulated market will generally be valued at the last traded price quoted on the relevant exchange or market as at the date of computation. If no trade is reported for that date or if the exchange was not open on that day, the last published sale price or the recorded bid price (whichever is more recent) shall be used. Unlisted equity securities will be valued initially at cost and thereafter, as the Scheme’s Manager shall in its discretion deem appropriate. Unlisted securities (other than equities), for which there is an ascertainable market value will be valued generally at the last known price dealt on the market on which the securities are traded on or before the day preceding the relevant date of valuation and unlisted securities (other than equities), for which there is no ascertainable market value, will be valued at cost plus interest (if any) accrued from purchase to (but excluding) the Valuation Date plus or minus the premium or discount (if any) from par value written off over the life of the security. Any value otherwise than in Nigeria Naira shall be converted at the prevailing market exchange rate.
Proposed addition to Note at end of Schedule VI:
An addition to “Note” at the end of Schedule VI is proposed
as follows:
Securities traded on a Stock Exchange or any regulated market will generally be valued at the last traded price quoted on the relevant exchange or market as at the date of computation. If no trade is reported for that date or if the exchange was not open on that day, the last published sale price or the recorded bid price (whichever is more recent) shall be used. Unlisted equity securities will be valued initially at cost and thereafter, as the Scheme’s Manager shall in its discretion deem appropriate. Unlisted securities (other than equities), for which there is an ascertainable market value will be valued generally at the last known price dealt on the market on which the securities are traded on or before the day preceding the relevant date of valuation and unlisted securities (other than equities), for which there is no ascertainable market value, will be valued at cost plus interest (if any) accrued from purchase to (but
excluding) the Valuation Date plus or minus the premium or discount (if any) from par value written off over the life of the security. Any value otherwise than in Nigeria Naira shall be converted at the prevailing market exchange
rate.
The closing unit price of Closed-ended funds shall be published on a daily basis on the fund manager’s website.
- PROPOSED AMENDMENT TO RULE ON TRADING IN UNLISTED SECURITIES-INCLUSION OF DEBT SECURITIES
1.1 Existing Rule (a):
All Securities of unlisted public companies shall be bought, sold or transferred only by means of a system approved by the Commission and under such terms and conditions as the Commission may prescribe from time to time.
Proposed amendment:
All securities of public unlisted companies shall be bought, sold or transferred only by means of a system approved by the Commission and under such terms as the Commission may prescribe from time to time.
1.2
Proposed New sub-rule (b):
A new sub-rule (b) is proposed as follows:
All debt securities issued in Nigeria by the Federal Government of Nigeria (“FGN”), Subnationals (State and Local Government), Supranational and Corporate entities, shall be bought, sold or transferred in the secondary market only through a SEC registered trading facility or
Securities Exchange.
1.3
Proposed New sub-rule (c) :
A new Rule (c) to include regulation of trading in foreign currency securities of Nigerian entities listed in other jurisdictions is proposed as follows:
All exchange of debt securities traded (including foreign currency securities of Nigerian entities listed in other jurisdictions like Eurodollar bonds) in the Nigerian capital market shall be executed on or reported to a SEC-registered Securities Exchange or trading facility.
1.4
Existing Sub-rule (b):
No person shall buy, sell or otherwise transfer securities of an unlisted public company except through the platform of a registered securities exchange established for the purpose of facilitating over-the-counter trading of securities.
Proposed amendment:
To be renumbered as Rule (d) and amended as follows:
No person shall buy, sell or otherwise transfer securities of a public unlisted company or government agency except through the platform of a SEC-registered securities exchange or trading facility established for the purpose of facilitating over-the-counter trading of securities.
1.5
Existing sub-rule (c):
Any unlisted public company, director, company secretary,registrar, broker/dealer or such other persons who facilitates the buying, selling or transfers of the securities of an unlisted public company otherwise than through the platform of a registered securities exchange, shall be liable to a penalty of not less than N100, 000 in the first instance and not more than N5, 000 for every day the infraction continues.
Proposed amendment:
The existing Rule (c) as outlined above to be slightly amended and renumbered as Rule (e) to read
as follows:
Any public unlisted company, director, company secretary, registrar, broker/dealer or such other persons who facilitate the buying, selling or transfer of the securities of a public unlisted company or government
agency otherwise than through the platform of a SEC-registered securities exchange or trading facility shall be liable to a penalty of not less than N100,000 in the first instance and not more than N5,000 for every day of default.
