Stakeholders endorse bill on demutualization of NSE

Stakeholders in the nation’s capital market have endorsed the ongoing consideration of a bill by the National Assembly to demutualize the Nigerian Stock Exchange (NSE) from a company limited by guarantee to a company limited by shares. They spoke at a public hearing on a bill titled “An Act to facilitate the development of Nigeria’s Capital Market by enabling the conversion and re-registration of the Nigerian Stock Exchange from a Company Limited by Guarantee to a Public Company Limited by Shares”. The event was jointly organized by the Senate and House of Representatives Committees on the Capital Market. Sponsor of the bill and Acting Chairman Senate Committee on Capital Market, Foster Ogola, said the Nigerian Stock Exchange plays a major role in Nigeria’s financial market and its conversion and re-registration into a public company limited by shares. This, he noted, is essential to develop and strengthen the capital market and enhance the formation of capital for the expansion of the Nigerian economy. He said the move was in line with the 2015-2025 Capital Market Master Plan, stressing that the proposed demutualization would promote efficiency in the creation and harnessing of capital as well as creating liquidity in the market and adopting and strengthening corporate governance best practices. “It is anticipated that the demutualization of the Nigerian Stock Exchange will reinforce the continuous growth and development of a dynamic, fair, transparent and efficient capital market and thus significantly contribute to Nigeria’s economic development” he said. Demutualization is the process where a mutual company converts into a company limited by shares. The NSE in its current status as a mutual entity, has limited options to raise capital. But as a demutualised Exchange, it will have access to broad pools of capital and make Nigeria more attractive to foreign investors. In his submission, the Chief Executive Officer, Nigerian Stock Exchange, Oscar Onyema said the move to demutualize NSE was in furtherance to the resolutions of the NSE Extraordinary General Meeting held on March 30, 2017 where members voted in favour of the demutualization exercise. He highlighted the benefits of a demutualized exchange to include: facilitating the development of the capital market, improved corporate governance, availability of resources from capital investments, enhanced competitiveness, increased global brand and visibility of the exchange, investor participation opportunities and ability to build a more sustainable institution. According to him, “It is of particular importance to the Nigerian capital markets and the wider economy that the Exchange be aided to successfully demutualize, as it enables the Exchange to serve the capital markets ecosystem and economy more effectively than it has done in the past”. On his part, Senate President, Bukola Saraki, praised the efforts of the NSE since its establishment in 1960 and her various positive contributions to the growth of the nation’s economy. Represented by Deputy Senate Chief Whip, Francis Alimikhena, Saraki said the proposed bill, if passed into law, would open more opportunities for the economy. Also speaking, Speaker House of Representatives, Yakubu Dogara, represented by House Minority Leader, Leo Ogor, said the House was working on retooling the Nigerian economy and would be ready to accept any initiative and ideas that would deepen our economy and create opportunities for economic growth. The Speaker pledged the readiness of the House to give the NSE every necessary support it needs to achieve its goals. Earlier in his address of welcome, the Chairman, House of Representatives Committee on Capital Markets and Institutions, Yusuf Tajudeen, said the gathering was a fulfillment of one of the resolutions of a stakeholders Forum on the Capital Market organized by the National Assembly in June 2016, stressing that the event was a “further demonstration of the commitment of the National Assembly through the Committees on capital market to re-position the NSE towards achieving its role not only as a critical institution but a major contributor to the economic development of Nigeria”.   OWEDE AGBAJILEKE, Abuja The post Stakeholders endorse bill on demutualization of NSE appeared first on BusinessDay : News you can trust .

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