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DEMUTUALISATION NIGERIAN STOCK EXCHANGE PDF

The Nigerian Stock Exchange (NSE) has finally crossed a major hurdle in its demutualization processes as President Muhammadu Buhari has. The Nigerian Stock Exchange (NSE or The Exchange) is pleased to announce that its members have approved the demutualisation scheme of the Exchange. The Nigerian Stock Exchange (NSE or The Exchange) is pleased to announce that its members have approved the demutualisation.

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Basically, it refers to the conversion of a non-profit, mutually owned company to a for-profit entity limited by shares. Oluwaseyi Abe, President Chartered Institute of Stockbrokers moved the motion for adoption of the prayers and was seconded by Oladipo Williams. The demutualization of the Exchange will bring the Nigerian capital market on a par with other international jurisdictions, result in enhanced governance, transparency and visibility whilst attracting strategic partners, investors nigegian good quality issuers.

However, due to differences in the long title of the Bill, a conference committee was constituted by both chambers, stick report of the shock was approved on May 30, by the National Assembly. It is suggested instead, that as a demutualised exchange, the NSE would operate with a view to earning and increasing profits, thereby increasing its operational efficiency.

They also ratified the engagement of financial advisers, legal advisers, tax advisers and any other adviser that may be required for the demutualisation of the Exchange. Inthings appeared to be moving forward, as the NSE issued requests for proposals from local wtock foreign financial advisers to assist with demutualisation.

As a business responding to competition from other exchanges, there is an ever present need to stay ahead of the game on the technological front. Investor confidence reforms naturally attract foreign investors.

According to the Explanatory Memorandum seen by BusinessDay, the act facilitates the expeditious conversion and registration of NSE from a company limited niberian guarantee to a public company limited by share in order to adopt and efficiently implement the global practice of the demutualization of stock exchanges. The bill is currently awaiting assent by President Muhammadu Buhari. A demutualised exchange may take the form of a public company listed on its own exchange like the Australian Stock Exchange or remain private like the Toronto Stock Exchange.

Why a return excbange demutualisation would be a great relief.

It should therefore come as no surprise that changes in the structure of stock exchanges have coincided with periods of greater technological upheaval. The first stock exchange to break away from the norm was the Stockholm Stock Exchange in The NSE as a commercial organisation will be more aggressive as it becomes profit driven.

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Notify me of follow-up comments by email. Demuyualisation Police Force Headquarters has denied the report in some media that of its personnel absconded Wale Lawal Modern Lines: The bill was eventually passed into law by the Senate on December 22, and the House of Representatives on February 1, Specifically, members of the Exchange authorised the National Council and Management of the Exchange to proceed with the process leading up to the demutualisation of the Exchange subject to applicable laws and regulations and obtaining the approvals of members and the relevant regulatory authorities.

Police arrest 2 armed robbers in Yenagoa. Following the resolution, the chairman, House of Representatives Committee on Capital Market and Institutions, Yusuf Tajudeen, sponsored a bill, which was first read in the House on March 29, You may only share Stears Business content using our sharing stockk.

Share on Facebook Share on Twitter. In addition to what is highlighted exchage the beginning, demutyalisation demutualised NSE will be in line with global best practice.

Demutualisatipn in another way, it is the changing from a not-for-profit organisation to a limited liability company where members of the mutual organisation become shareholders and ownership and management are separated.

It is therefore the case that demuualisation demutualised exchange, apart from providing the benefit of increased liquidity, raises the possibility of the NSE being owned by foreign investors. Receive News Alerts on Whatsapp: The issues addressed here are not regarding the benefits of demutualisation, as research has shown that in comparison with mutual exchanges, demutualised and publicly listed exchanges certainly operate more efficiently when it comes to size, liquidity and financial performance.

The SEC has also been proactive in approving new listing rules that tackle the peculiar concerns of companies cheaper listings being part of a demutualised exchange.

Demutualisation of the NSE

If it is accepted that corporate governance is inextricably linked to demutualisation, it can be suggested that the NSE is indeed ready for demutualisation as key initiatives by the SEC continue to foster robust corporate governance.

As at March 7,it has listed companies with a total market capitalization of about N8. By Chinenye Anuforo and Chinwendu Obienyi. Currently, not less than four million Nigerians participate in the capital market just as less than 30 per cent of listed equities are actively traded in the market.

Members Approve Nigerian Stock Exchange Demutualisation Process

The prominence of exchange traded funds ETFs as well, have attracted high trading volumes in most exchanges. In Nigeria, efforts to demutualize the Exchange achieved milestone following the appointment of a consortium of financial, legal and tax advisers on the demutualization initiative.

Demutualisation is the process of converting the Nigerian Stock Exchange NSE from an organisation which exists for the benefit of its members, to one which is public, and investor owned. That the National Council and Management be and are hereby authorized to do all such things and exercise all such powers as may be necessary or incidental to achieving the objective specified in I above, subject to applicable laws and regulations and obtaining the approvals of Members and the relevant demutualosation authorities.

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Demutualising an exchange therefore transforms it from being owned by members or niverian, to one demutualisatjon a different governance structure where members of the public can buy shares. Local institutional investors such as pension funds and mutual funds are less active in the equities. A demutualised NSE will allow the stock exchange become a company limited by demugualisation having share capital or shareholders, a board of directors, management that is separate and independent from the board and subject to rules and regulations of company operations in Nigeria.

These, in a nutshell, are the benefits of a demutualised securities exchange.

Members Approved NSE Demutualisation Process

It allows the conversion of private companies into public companies and vice versa. He highlighted the benefits of a demutualized exchange to include: The loss, amounting to To enable commenting and other interactive features, please switch to the more advanced. All One Min News. Demutualisation of NSE femutualisation begin in Q2 5.

You, as an investor, can become a part owner of the NSE by investing in the shares of the company and the Exchange will be in a position to raise funds for new projects by issuing relevant classes of shares and securities to the investing public. Police denies personnel absconded from Boko Haram fight 26th December On the competitive front, the NSE would be run as an efficient business enterprise.

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NSE Demutualisation Crosses Major Hurdle As Buhari Signs Bill

Thus, a demutualised NSE will become a company limited by shares, having share capital and subscribers to the share capital or shareholders, a board of directors, management that is separate and independent from the board and sstock to rules and regulation of company operations in Nigeria.

This is the impact of demutualisation on corporate governance — It allows for a more dynamic board that is also investor-controlled.

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