The NSE demutualisation bill, which would transform the Nigerian Stock Exchange into a typical company, has finally been signed into law by Nigeria’s President Muhammadu Buhari.
The NSE’s Chief Executive Officer, Mr Oscar Onyema, disclosed this on Monday during the 2018 Market Recap and 2019 Outlook event held at the Stock Exchange House in Marina, Lagos.
According to Mr Onyema, following the bill signing, it is now left for the NSE Council and all the other stakeholders to decide on a takeoff date.
“Demutualisation Bill has been accented to and signed into law by the president, as the Exchange along with other stakeholders are working on the final stages of the process.”
As we reported earlier, the NSE boss highlighted some of the achievements recorded last year by the Nigerian bourse. These include, among other things, the 11.75% increase in market capitalisation from N9.10 trillion to N11.17 trillion.
Mr Onyema also spoke about measures being put in place to encourage more listing on the Nigerian bourse, seeing as only one company was listed in 2018 even as four delisted.
He also reiterated the NSE’s commitment to continually protect the investing public, even though it pointed out that it does not have the power to stop Nigeria’s apex bank, the Central Bank of Nigeria, from performing its regulatory functions which can often entail liquidating banks whose stocks are traded on the NSE.
Now, more on the demutualisation of the NSE
Efforts to demutualise the Nigerian Stock Exchange has been a long-standing one. Little wonder it has finally yielded the expected result. In 2015, the Securities and Exchange Commission (SEC) issued the Exposure draft rules on demutualisation of exchanges in Nigeria.
That same year, the Nigerian Stock Exchange appointed financial advisers to advise it on a proposed demutualisation.
Early last year, Nigeria’s lower house of legislature, the House of Representatives, passed a bill amending the laws establishing the NSE. This followed an earlier signing of a similar bill by the Senate, all part of the processes leading to the demutualisation of the Nigerian bourse.
Note that when the newly-signed demutualisation bill is implemented, the NSE will transform into a typical company, with board of directors and an independent management. The company’s shares will also be available for public ownership, even as it will be subject to the rules and regulations governing companies in Nigeria.