Operators in the Nigerian capital market have hailed the National Assembly for the passage of the bill on the demutualization of the Nigerian Stock Exchange (NSE) describing the development as both timely and reasonable.

They also urged President Muhammadu Buhari to speedily give assent to the bill in view of what they described as its “huge benefits to the nation’s economy.”

The bill seeks the conversion of the NSE from a company limited by guarantee to a company limited by shares. 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 and for related Matters, 2017” (Otherwise called “Demutualization Bill”), it was passed by the Senate on Thursday December 22, 2017 and the House of Representatives on Thursday February 1, 2018.

However, following differences in the long title of the Bill, a conference committee was subsequently constituted by both chambers; the report of which was approved on May 30 and 31, 2018, by the House and Senate respectively.

Justifying the essence of demutualization, Oscar Onyema, NSE chief executive, said the bill, which is awaiting presidential assent, would give the NSE the flexibility to respond swiftly to industry shifts and economic headwinds/tailwinds, faster and more real-time trading operations, fostering more effective competition on a global scale, better positioning for the listing of large multinationals and local corporate in Nigeria, as well as better positioning to innovate, embrace market changes and meet customers’ demands.

Onyema further stated that NSE’s conversion and re-registration into a public company limited by shares 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 also 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,” Onyema said.

Praising the courage and foresight of federal lawmakers, a Stockbroker and managing director, Centrepoint Investments Limited, Emmanuel Awure, said that the bill when functional would result in an increased value of the Nigerian Stock Exchange, enabling it to compete favourably in the global market, open the doors for significant investment into Nigeria and ultimately enhance the nation’s capital market.

He said: ‘‘The demutualization of the Exchange will bring the Nigerian capital market at par with other international jurisdictions, result in enhanced governance, transparency and visibility whilst attracting strategic partners, investors and good quality issuers”.

In the same vein, Ms Elizabeth Okolo of Capital Assets Limited Lagos congratulated both the Council and members of the NSE on the passage and urged President Buhari to expeditiously consider and sign the bill into law stressing that the demutualization when implemented, would give the Exchange the ability to take a number of strengthening actions, that will promote transparency and increase efficiency in its operations.

“The demutualization holds a number of significant benefits for the Nigerian economy including augmentation of Nigeria’s debt profile, increase capital raising capabilities, capital support for government initiatives, attraction of foreign and local investors and assisting corporate and financial institutions to raise capital,” she added.