The Securities and Exchange Commission, SEC, announced that it will restrain fintech startup, Chaka Technologies Limited, and its promoters from advertising or offering for sale shares, stock or other securities of companies or other entities.
This was disclosed in a statement by the SEC on Saturday evening. SEC said its Investments and Securities Tribunal (IST) gave an interim order on Thursday, 17th December 2020.
SEC said the interim order applies to all Chaka platforms, citing that the startup carried out operations outside the regulatory purview of the Commission and without requisite registration.
- The interim Orders, which apply to all Chaka platforms, were granted pursuant to an application by the Securities and Exchange Commission.
- In the application, the Commission – through its solicitor, Dr. Chuka Agbu, SAN – informed the Tribunal that the Defendants were engaged in investment activities, including providing a platform for the purchase of shares in foreign companies such as Google, Amazon and Alibaba.
- The Commission also stated that the said activities were carried out by the Defendants outside the regulatory purview of the Commission and without requisite registration, as stipulated by the Investment and Securities Act 2007.
SEC said the Interim order is to ensure Chaka’s operations are regulated by law to protect investors interest.
- “As disclosed in the processes filed by the Commission, the objective of the proceedings is to ensure that all investment activities and market players are duly regulated by the Commission, in line with the requirements of the law. The Commission is concerned that without proper regulation, the genuine aspirations of market innovators and investors could be subverted through the activities of unscrupulous actors, who would try to exploit the growing popularity of Fintech investment options, to the detriment of the investing public. Further proceedings before the Tribunal have been adjourned to January 15, 2021.”
What you should know
- Nairametrics had an interview with Chaka CEO, Tosin Osibodu, where he explained how investing in foreign stocks is made easy through Chaka’s platform.
- Nairametrics also reported that the New York Stock Exchange (NYSE) has about 2,800 companies listed, while the NASDAQ has about 3,300 stocks listed, which gives investors in Nigerian market numerous options, where they can put their money, using applications to use like Trove, Bamboo, and Chaka.
FEC approves new Debt Management strategy for 2020–2023
The FEC has approved a new Medium Term Debt Management Strategy (MTDS) for Nigeria.
The Federal Government has indicated it is looking inward as far as debt is concerned.
This point was unscored in the approval of the medium term Debt Management Strategy for the period 2020-2023 as disclosed by the Debt Management Office (DMO) in a statement issued on Wednesday after the FEC held its meeting in Abuja.
The MTDS policy as a document tries to articulate the debt mix of the government considering the cost and risk trade-offs that best suit the country’s broader macroeconomic and public debt management
It stated, “The MTDS, 2020-2023 has been prepared by the DMO, in collaboration with Federal Ministry of Finance, Budget and National Planning and the Central Bank of Nigeria.
“Other collaborating stakeholders are the Budget Office of the Federation, National Bureau of Statistics and the Office of the Accountant-General of the Federation.”
What has changed
With the new strategy, a larger proportion of new borrowing will be from domestic sources using long-term instruments while for External Borrowing, concessional funding from multilateral and bilateral sources will be prioritised.
Also, the target of fiscal sustainability has been increased from 25% (MTDS, 2016-2019) to 40% in the new strategy.
In simple language, the government wants to increase borrowing from 25% of GDP to 40%. While this will provide investment outlets to investors and mop up cash and calm inflation rate, it will also put a lot of pressure on the domestic debt market, interest rate and liquidity.
The target, according to DMO, was increased to accommodate new borrowings to fund Budget Deficits and other obligations of Government; Promissory Notes to be issued to settle Government Arrears; and, the Ways and Means Advance at the Central Bank of Nigeria.
DMO added that the strategy would sustain the issuance of longer-tenored instruments with tenors of 10 years and above, in order to effectively manage Refinancing Risks.
Why it matters
The new debt policy has to be reworked in light of the current global pandemic, reduced revenue from shock and volatility in the oil market. The public works in the budget will be funded, indicating there is a low likelihood of project abandonment.
Government appetite for debt seems to have found some cover or justification from the assertion by DMO that Nigeria is still well below the threshold 55% for countries in Nigeria’s peer group, but massing debt could constraint government flexibility in public finance in the coming years and reduce monetary policy tool available to CBN.
Ecobank Nigeria to launch $300 million senior notes on International Debt Market
Ecobank Nigeria has announced that it is seeking to raise $300 million from the international debt capital market through the issuance of senior notes.
Ecobank Nigeria, a subsidiary of Ecobank Transnational Incorporated (‘’ETI’’) has announced that it is seeking to raise $300 million from the international debt capital market through the issuance of senior notes.
This is contained in a disclosure signed by the Group Head, Adenike Laoye and published on the website of the Nigerian Stock Exchange (NSE).
According to the bank, the proceeds from the Eurobond will help to provide medium-term funding for the company and also help to enhance its capacity to support international trade and service in Africa.
A part of the disclosure reads, “Ecobank Nigeria Limited (the “Bank”), a key subsidiary of Ecobank Transnational Incorporated (“ETI”) is seeking to raise capital from the international debt capital market through the issuance of US$300 million senior notes (the “Notes”), pursuant to the United States Securities and Exchange Commission Rule 144A and Regulation S (the “Transaction”).”
What you should know
- The Notes will be listed on the London Stock Exchange through a Dutch special purposes funding vehicle.
- The bank also noted that the transaction is subject to prevailing market conditions and the conclusion of the necessary transaction documentation.
- It is important to note that Ecobank Nigeria intends to list the Notes on the London Stock Exchange, with the expectation that the Notes will be traded on its regulated market.
- Also, the Central Bank of Nigeria has confirmed that it has no objection to the Transaction, as stated in the disclosure.
- Recall that Nairametrics reported in January that Ecobank Nigeria announced that it secured a N50 billion, 10-year bilateral subordinated loan with the aim of maintaining stable liquidity and improving its balance sheet.
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