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SEC to strictly regulate crowdfunding, issues new rules

SEC has proposed a new set of rules that will regulate crowdfunding businesses and deepen the capital market in Nigeria.

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The Securities and Exchange Commission (SEC) has proposed a new set of rules that will regulate crowdfunding businesses and deepen the capital market in Nigeria.

The commission had some weeks back, announced its plans to regulate the crowdfunding business in Nigeria in order to reduce the risks associated with it for investors and financiers.

Crowdfunding is the practice of raising a small amount of fund from a large number of people typically through the internet and has been an alternative source of finance for businesses. It is the use of small amounts of capital from a large number of people to finance a new business venture.

Some of these rules which were obtained from the commission’s website are as follow:

  • All Micro Small and Medium Enterprises (MSMEs} incorporated as companies in Nigeria with a minimum of two years operating track record shall be eligible to raise funds through a crowdfunding portal registered by the commission, in exchange for the issuance of shares, debentures or any other investment instrument.
  • Issuance of securities or other investment instruments shall be conducted through a registered crowdfunding portal.
  • The term issuer as used in the rule, shall include all entities controlled by or under common control with the issuer and any predecessors for the purpose of calculating the aggregate amount of securities and investment instruments offered and sold by an issuer under this rule and determining whether an issuer has previously sold securities or investment instruments within a 12-month period.
  • The aggregate amount of securities sold to any investor in investment-based crowdfunding during the 12-month period shall not exceed 10% of their annual income in a calendar year for retail investors. However, sophisticated, high net worth and qualified institutional investors are not subject to any limits.
  • Some exemptions to certain provisions in this rule include: the issuer may offer or sell securities or investment instruments without the need for prior registration of the securities or investments as long as the issuer is an entity incorporated in Nigeria and accredited and /or accepted by a crowdfunding portal to utilize its platform.
  • The aggregate amount of securities or investment instruments that can be offered and sold by the issuer within a 12-month period shall comply with the following limit: medium enterprises can only raise a maximum amount not exceeding N100 million, small enterprises can only raise a maximum amount not exceeding N70 million and micro-enterprises can only raise a maximum amount not exceeding N50 million.
SEC to strictly regulate crowdfunding, issues new rules

Crowdfunding

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[READ MORE: SEC adjusts operations, introduces e-filing, other measures)

The commission also set out some rules for the operation of crowdfunding portals.

Crowdfunding portal is a website, portal, intermediary portal, application, or other similar modules that facilitate interaction between fundraisers and the investing public.

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Some of the requirements for crowdfunding portals are:

  • Every platform that facilitates interaction between fundraisers and the investing public (crowd) for the purpose of any investment-based crowdfunding shall be registered with SEC as a crowdfunding portal.
  • A crowdfunding portal that is located outside Nigeria will be considered as actively targeting Nigerian investors if the operator or its representative, promotes directly or indirectly the platform in Nigeria.
  • A crowdfunding portal may be registered and operated only by an operator registered with the commission as a crowdfunding intermediary
  • Only entities registered with the commission as an exchange, dealer, broker, broker/dealer or alternative trading facility as prescribed under the Act and the SEC rules and regulations may be registered as a crowdfunding intermediary.

You can have a comprehensive look at the rules here.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Coronavirus

Covid-19: US to have enough vaccines for vulnerable Americans by end of 2020

The US said it is likely to have enough safe and effective COVID-19 vaccines to inoculate Americans by the end of 2020.

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AstraZeneca suspends COVID-19 vaccine final stage trial over safety concerns, COVID-19: J&J starts vaccine trials on humans after success on monkeys

The United States, On Wednesday, revealed that the country is likely to have enough safe and effective COVID-19 vaccines available to inoculate the most vulnerable Americans by the end of 2020.

The U.S. government is cautiously optimistic that one or two vaccines, likely from Pfizer Inc or Moderna Inc, will be available by the end of the year, and can begin to be distributed to Americans, officials said during a news conference.

This was disclosed by the United States Secretary of Health and Human Services, Alex Azar, on Wednesday, October 22, 2020.

Azar said he expected that all seniors, healthcare workers, and first responders would be able to receive vaccines as soon as January, with the rest of the American public able to get vaccines by April.

Companies participating in the U.S. government’s effort to develop vaccines for COVID-19, dubbed Operation Warp Speed, have begun developing manufacturing capabilities even before any vaccination has been authorized by regulators.

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Nairametrics had reported that in an open letter, the Chief Executive Officer of Pfizer Inc, Albert Bourla, disclosed that it could seek emergency use authorization of Covid-19 vaccine in the US by late November, after the US presidential election.

The coronavirus outbreak has been worsening in recent weeks as cold weather pushes Americans indoors, raising the chance of contracting the virus. Some 38 U.S. states and two territories have reported rising case counts. More than 8 million Americans have been infected with the novel coronavirus and more than 200,000 have died.

What this means: This announcement rules out the assertion by US President, Donald Trump, that a Covid-19 vaccine would be ready before the Presidential election. This is also a huge boost for the country, which has suffered the heaviest casualties globally from the pandemic.

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Business

IGP orders immediate withdrawal of police officers attached to VIPs

The IGP has ordered the immediate withdrawal of police officers attached to all VIPs across the country.

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The Inspector-General of Police (IGP), Mohammed Adamu, has ordered the immediate withdrawal of Police Officers who are attached to all Very Important Persons (VIPs) across the country. The Police Officers exempted from this directive are those attached to Government Houses; the Senate President; and the Speaker, House of Representatives.

According to media reports, the directive was contained in a police wireless message dated October 21, 2020, that was sent virtually to Zonal Assistant Inspector General of Police and State Commissioners of Police with reference number, CB:4001/DOPS/SPU/FHQ/ABU/VOL./ORDER.

The statement said, “Any commander who violates this order will bear the consequences.”

This new directive comes barely 10 days after the police authorities disbanded the Special Anti-Robbery Squad (SARS), following nationwide protests against the squad for high handedness and extrajudicial killings.

The signal, which was signed by the AIG POL, Protect, Force Headquarters, Abuja, partly read, “Any protect personnel found escorting or guarding any VIP with or without a firearm is deemed to be deployed by the Commander and the Commander will be sanctioned.”

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It further directed the affected personnel to report to their respective command Commissioners of Police.

It can be recalled that successive IGPs have issued similar orders in the past, which were barely implemented.

In another development, the IGP has sent emissaries to the Chairman, Police Service Commission (PSC), Musiliu Smith, in a bid to have a smooth working relationship with the retired police boss.

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It was gathered that two former IGs, Mike Okiro, and Suleiman Abba, visited the PSC Chairman at his office in Abuja on Wednesday, following Smith’s refusal to meet with Adamu on several occasions.

A source explained that Okiro and Abba spent over three hours trying to persuade Smith to reconcile with the IG, who has been at loggerheads with the PSC over the recruitment of constables into the Nigeria Police Force.

What this means

This appears to be part of measures aimed at kick-starting the much talked about reforms in the Nigerian Police Force. The full implementation of this order will make more police officers available to provide security to Nigerians, as a huge number of the force provides security to private individuals and companies in a country that is greatly under policed.

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Coronavirus

COVID-19 Update in Nigeria

On the 21st of October 2020, 37 new confirmed cases were recorded in Nigeria

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The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 61,667 confirmed cases.

On the 21st of October 2020, 37 new confirmed cases were recorded in Nigeria, having carried out a total daily test of 4,648 samples across the country.

To date, 61,667 cases have been confirmed, 56,880 cases have been discharged and 1,125 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 595,283 tests have been carried out as of October 21st, 2020 compared to 590,635 tests a day earlier.

COVID-19 Case Updates- 21st October 2020,

  • Total Number of Cases – 61,667
  • Total Number Discharged – 56,880
  • Total Deaths – 1,1125
  • Total Tests Carried out – 595,283

According to the NCDC, the 37 new cases were reported from 9 states – FCT (8), Lagos (7), Taraba (5), Rivers (5), Adamawa (4) Kaduna (3), Anambra (2), Osun (2), Ogun (1).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 20,733, followed by Abuja (5,943), Plateau (3,587), Oyo (3,421), Rivers (2,742), Edo (2,648), Kaduna (2,572), Ogun (1,987), Delta (1,812), Kano (1,741), Ondo (1,659), Enugu (1,314),  Kwara (1,050), Ebonyi (1,049), Osun (918), Katsina (904), Abia (898), Gombe (883).  Borno (745), and Bauchi (710).

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Imo State has recorded 607 cases, Benue (484), Nasarawa (478), Bayelsa (403),  Ekiti (329), Jigawa (325), Akwa Ibom (295), Anambra (277), Niger (274), Adamawa (248), Sokoto (162), Taraba (117), Kebbi (93), Cross River (87), Zamfara and Yobe (79), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

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The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

 

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