The Nigerian Government has expressed its support for the current efforts by the National Assembly to amend the existing Nigerian Stock Exchange Act of 1960 to enable the NSE convert from a company limited by guarantee to a company limited by shares.
Minister of Finance Kemi Adeosun, who made this know at the weekend said access to global best practices and creation of a better regulatory framework/formula for ownership stakes were part of the reasons that made government to give its nod to the amendment.
Adeosun also said that the amendment would allow greater independent investor participation in governance of the exchange and put the exchange in a better position to support the economy.
She spoke through the Director Home Affairs in the Ministry, Mrs Olubunmi Shinobola, at a Public Hearing on a bill titled “ An Act to facilitate the development of Nigeria’s Capital Market by enabling the Conversion and re-registration of the Nigerian Stock Exchange from a Company Limited by Guarantee to a Public Company Limited by Shares and for related Matters, 2017”.
The event was jointly organised by the Senate and House of Representatives Committees on the Capital Market, held at the National Assembly on Thursday in Abuja.
Other speakers such as the Governor of the Central Bank of Nigeria, Director-General of the Securities and Exchange Commission, SEC, and Registrar, Chartered Institute of Stockbrokers, all gave their support to the Bill.
In his opening remarks, Acting Chairman, Senate Committee on Capital Market and Sponsor of the Bill, Senator Forster Ogola said the Nigerian Stock Exchange plays a major role in Nigeria’s financial market and its conversion and re-registration into a public company limited by shares
Ogola said it was essential to develop and strengthen the capital market and enhance the formation of capital for the expansion of the Nigerian economy.
He said the move was also in line with the 2015-2025 Capital Market Master Plan stressing that the proposed demutualisation would promote efficiency in the creation and harnessing of capital, as well as creating liquidity in the market and adopting and strengthening corporate governance best practices.
“It is anticipated that the demutualisation of the Nigerian Stock Exchange will reinforce the continuous growth and development of a dynamic, fair, transparent and efficient capital market and thus significantly contribute to Nigeria’s economic development,” Ogola said.
He urged all stakeholders to endorse the Bill.
Others who endorsed the bill include, Registrar, Corporate Affairs Commission, Association of stockbroking Houses of Nigeria, Chairman, Investments and Securities Tribunal, DG, Nigeria Pension Commission.
The bill had earlier passed first and second readings on the floors of both chambers of the National Assembly.
Justifying the new bill Mr Oscar Onyema, Chief Executive Officer of the NSE said it was in furtherance to the resolutions of the NSE Extraordinary General Meeting held on March 30, 2017 where members voted in favour of the demutualisation exercise.
He highlighted the benefits of a demutualised exchange to include: facilitating the development of the capital market, improved corporate governance, availability of resources from capital investments and enhanced competitiveness.
Others include increased global brand and visibility of the exchange, investor participation opportunities and ability to build a more sustainable institution.
According to him, “it is of particular importance to the Nigerian capital markets and the wider economy that the Exchange be aided to successfully demutualise, as it enables the Exchange to serve the capital markets ecosystem and economy more effectively than it has done in the past,” the CEO said.
In his own remarks, Senate President, Dr Bukola Saraki, represented by Senate Deputy Chief Whip, Senator Francis Alimikhena praised the efforts of the NSE since its establishment in 1960 and her various positive contributions to the growth of the nation’s economy.
Saraki said that the proposed bill if passed into law would open more opportunities for the economy.
He urged those in attendance to make useful contributions to ensure a robust discussion and legislation.
Also speaking, Speaker House of Representatives, Hon. Yakubu Dogara, represented by House Minority Leader, Leo Ogor, said the House was working on retooling the Nigerian economy and would be ready to accept any initiative and ideas that would deepen our economy and create opportunities for economic growth.
The Speaker pledged the readiness of the House to give the NSE every necessary support it needs to achieve its goals.
The Chairman, House of Representatives Committee on Capital Markets and Institutions, Hon. Yusuf Tajudeen said the gathering was a fulfillment of one of the resolutions of a stakeholders Forum on the Capital Market organised by the National Assembly in June 2016.
He stressed that the public hearing was a further demonstration of the commitment of the National Assembly through the Committees on capital market to re-position the NSE towards achieving its role not only as a critical institution but a major contributor to the economic development of Nigeria.