The Securities and Exchange Commission (SEC) has rolled out a new set of rules for warehousing and collateral management in the country, as it set N50 million as the minimum paid-up capital.
This is to ensure that the country has a vibrant commodities trading system which would translate into foreign exchange earnings for the country.
According to a report from the News Agency of Nigeria (NAN), this disclosure is contained in a statement issued by the commission to the press on Sunday, March 28, 2021.
What SEC is saying in the statement
SEC in its statement said that the move would translate into foreign exchange earnings for the country, adding that every warehouse that stores commodities to be traded on a registered Exchange, shall apply to be registered by the commission.
The statement from the commission reads, “A warehouse applying for registration going by the rule, shall submit proof of ownership or registered-lease deed or rent agreement.
“They will also come along with a disclaimer from the owner of the warehouse/property, providing a waiver of ownership regarding commodities stored in such warehouse.
“In the case of leased or rented warehouse; present evidence of construction in compliance with the National Building Code and have facilities appropriate for storage of commodities.”
The rule also states that for a Collateral Management Company (CMC) to be registered by the commission, an application would be filed to SEC, accompanied by the relevant documents.
The new rule listed some of the documents required to include 2 sets of completed SEC forms to be filed by the sponsored individuals and a copy of the Certificate of Incorporation, certified by the Corporate Affairs Commission, among others.
The rule, according to the statement, also further requires Fidelity Bond representing 20% of paid-up capital, a sworn undertaking to keep proper records and render returns, and evidence of minimum paid-up capital of N50 million. This is in addition to the application for registration of a minimum of 2 sponsored individuals, one of whom shall be the Chief Executive Officer.
SEC stated that the principal officers of the CMC, who shall be registered as sponsored officers must have a minimum of a university degree or its equivalent with not less than 10 years relevant post-qualification experience.
The rule also states that the warehouse should be located in a place with access to infrastructure to support its operations, have sufficient space for parking and movement of large vehicles, and have an efficient system for loading/unloading of commodity including the proper mechanism for segregation of different kinds/quality of commodity.