The NSE effectively becomes part regulator and part profit making company. Technological advancement in the financial world over the last two decades, has significantly increased competition among stock exchanges globally and this competition has pressured many exchanges to adopt business models, which have greatly improved their efficiencies and effectiveness.
According to the Act, NSE will establish a Claims Review Panel made up of a chairman and four other members which will review and determine any assertion by any person to any right in the share of the exchange as such assertion having been made anytime between the coming into force of this act and six years after conversion of the exchange from a company limited by guarantee to a public company limited by shares.
That the National Council and Management be and are hereby authorized to do all such things and exercise all such powers as may be necessary or incidental to achieving the objective specified in I above, subject to applicable laws and regulations and obtaining the approvals of Members and the relevant regulatory authorities.
NSE restructures ahead of demutualisation plans. To receive our NEW investment newsletter containing intelligent investing news, data, analysis and research, type in your e-mail address. According to data from demutuailsation World Federation of Exchanges, more than 70 per cent of members have transformed their legal structure from non-profit mutual Exchanges into demutualized organizations.
In addition to what is highlighted at the beginning, a demutualised NSE will be in line with global best practice. In Nigeria, efforts to demutualize the Exchange achieved milestone following the appointment demutuailsation a consortium of financial, legal and tax advisers on the demutualization initiative. Other type of directors, with expertise in IT systems, product information etc, are brought in to make the exchange more competitive in its strategic outlook.
The report that both chambers of the National Assembly have passed the enabling bills to demutualise the Nigerian Stock Exchange NSE into law brought succour to investors and the entire market community.
This is the impact of demutualisation on corporate governance — It allows for a more dynamic board that is also investor-controlled. This website uses cookies to improve your experience while you navigate through the website.
Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are as essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website.
Demutualieation confidence reforms naturally attract foreign investors. Notify me of new posts by email. The challenge lies with the governing law dealing with corporate matters in Nigeria. By Chinenye Anuforo and Chinwendu Obienyi. The NSE effectively becomes part regulator and part profit making company. That the engagement of financial advisers, legal advisers, tax advisers and any other adviser that may be required for the Demutualisation of The Exchange be and is hereby ratified and approved.
It is therefore the case that a demutualised exchange, apart from providing the benefit of increased liquidity, raises the possibility of the NSE being owned by foreign investors. Those who have endorsed the bill so far include; the Finance Minister, Mrs. As a demutualised entity that is profit-seeking, the NSE will be in a better stead to capitalise on new income opportunities, free from any limitations arising from conflicting member interests and existing laws and more importantly, be able to better support the economic growth of Nigeria.
You would be the first to know the latest happenings around the Financial Market on Markets. Up till the early s, most of world stock exchanges were non-profit, mutual organizations limited by guarantee and monopolized by members and stock brokers. Demutualisation leads to lesser influence of trading members of the NSE on corporate decisions, as their board representation diminishes. Wale Lawal Modern Lines: Indeed, there is an urgent need for regulators to attract more investors to the market and boost participation.
In addition to what is highlighted at the beginning, a demutualised NSE will be in line with global best practice. Demutualisation then is the process by which a mutually-owned organisation transforms to a shareholder-owned entity. Follow us on social media: To enable commenting and other interactive features, please switch to the more advanced. Exchanges demutualise in reaction to competition and technological innovations. Put in another way, it is the changing from a not-for-profit organisation to a limited liability company where members of the mutual organisation become shareholders and ownership and management are separated.
Glaringly, a significant part of the current problem with the capital market is low confidence especially on the part of the domestic investors. It will be liable and responsible to its shareholders in terms of return on investment unlike the previous status quo where funds were internally generated and profit making was not a defined objective.
CAN advises el-Rufai to stop chasing shadows over threat to arrest Enenche. The prominence of exchange traded funds ETFs as well, have attracted high trading volumes in most exchanges. The NSE effectively becomes part regulator and part profit making company. Similarly, they pointed out that with demutualisation, corporate governance would be well structured and investors would have more confidence to stake their xechange in the market.
Regrettably, exchang being the largest economy in Africa, Nigeria Stock Exchange established 58 years ago, is yet to demutualize. The Bill is titled: Other type of directors, with expertise in IT systems, product information etc, are brought in to make the exchange more competitive in its strategic outlook.
Mazi Okechukwu Unegbu, former President, Institute of Bankers of Nigeria CIBN demutualisatuon, said security issues and the social environment were responsible for the negative sentiments in the capital market.
Unegbu said government must encourage local investors to invest in the market by creating the right environment. SEC explained that with demutualisation, the NSE should be exposed to robust corporate governance, enhanced efficiency and transparency associated with publicly quoted companies.
Uwaleke said the market had remained bearish despite the oil price recovery, stable exchange rate, retreating inflation and even improved company fundamentals. Up till the early s, most of world stock exchanges were non-profit, dejutualisation organizations limited by guarantee and monopolized by members and stock brokers. This has been the structure of stock exchanges until when the Stockholm Stock Exchange SSE took steps to change its form and structure.
Wale Lawal Modern Lines: With this, I believe Nigerian investors will subscribe to it and it will deepen our capitalisation and the entire market. Indeed, there is an urgent need for regulators to attract more investors to the market and boost participation. According to data from the World Federation of Exchanges, more than 70 per cent of members have transformed their legal structure from non-profit mutual Exchanges into demutualized organizations.
As a demutualised entity that is profit-seeking, the NSE will be in a better stead to capitalise on new income opportunities, free from any limitations arising from conflicting member interests and existing laws and demutualisxtion importantly, be able to better support the economic growth of Nigeria.
0コメント