NEW ISSUES TO COST LESS BUT MORE TO FILE AND PROCESS

Soon, it may cost less to raise money through the Nigerian capital market but a lot more to file and process.

According to various amendments to existing rules and charges being proposed by the Securities and Exchange commission (SEC) the % take of various professionals involved in the  issuance of fixed income and equity securities will be adjusted mostly downwards including new caps for many of them.

The SEC is proposing to reduce issuance cost for fixed income bonds for example by proposing zero income for the Nigerian stock exchange if it is from an already listed equity abd reducing the current 0.15% of offer to 0.0375% for non-already listed and 0.05% for state and supranational bonds.

The adjustments being proposed do not affect the NSE alone every one involved from issuing houses to receiving agents, and solicitors are to settle for slightly lower % of the offer value as fees.

The only exception are stockbrokers whose % take remains 0.13% of offer value for both equity and fixed income securities.

In addition, auditors, for example are being proposed to have N4m maximum on their lower 0.01%; reporting accountants are to have minimum of N1m and maximum of N7.5m on their lower 0.05% and solicitors to the issue may settle for lower 0.05% and N10m cap.

What SEC itself takes will also be adjusted downward but in phases that will encourage higher offer value  In the proposals it is to receive unchanged 0.15% for first N500m of fixed income offers, scale down to 0.145% for the N500m and 0.1425% beyond 

In the case of equity issue SEC's take goes down to 0.275% of first N500m from current 0.30% as the only amendment being since it take on next N500m and balance beyond stays at 0.225% and 0.15% respectively 

It is in filing and processing fees SEC is aiming for more. Filing fees is being upped to N50,000 from N5000 and processing fees now appears with N200,000.

Registration fees are also on being upped for each category of registration required from about N100,000 hitherto to between N1m and N500,000.

SEC says for now these and some other proposals remain subject to formal approval and so, stakeholders have until March 28 to react to them through rulescommittee@sec.gov.ng

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