The Nigerian Exchange provides access to capital for Nigerian and international companies, from small-cap and growth-oriented companies to more established businesses looking to utilise the capital market to fund their business and expansion strategies. Also, stock market listing raises long-term equity finance for companies by offering shares to potential public and institutional investors.
The Nigerian capital market regulator, the Securities and Exchange Commission (SEC), recently unveiled an initiative to enhance the attractiveness and efficiency of the Nigerian capital market by simplifying the process for companies to list their shares on the Nigerian Exchange. ‘Time to Market’ refers to the time it takes for a company to complete the capital raising process and list its shares on a stock exchange.
Leveraging The Platform
The Commission had earlier developed initiatives to streamline registration processes, introduce an electronic filing system, and enhance regulatory frameworks, among other things. Having developed frameworks for the ongoing banking recapitalisation process, this, it stressed, ensures a smooth and transparent capital-raising process for banks.
On August 15, the Commission approved recapitalisation offers received from commercial banks, marking a significant step in the recapitalisation exercise, even as a digitalisation drive is being implemented by the regulatory body, including electronic submission and processing of applications for securities to minimise delays while it introduced a checklist review for the registration of fixed-income securities, which has significantly shortened review and approval timelines.
The SEC’s director general, Dr. Emomotimi Agama, said the agency has undertaken significant regulatory reforms to simplify the approval process. These reforms, he said, include updating rules to reflect current market realities and adopting international best practices that promote efficiency.
Stakeholders’ Views
While commenting on the initiative, the vice president of Highcap Securities Limited, David Adnori, stated that it is a good development as delays used to occur between the time the issuers filed their applications to the SEC and the time those applications were approved.
He added that this recapitalisation exercise proves that the SEC has considerably reduced the delay in completing applications and the approval process.
A financial analyst, Dr Timi Olubiyi, said, “Listing does encourage good corporate governance culture from the listed companies. It can also raise the company’s public profile with customers, suppliers, investors, and financial institutions, and it can majorly help SMEs with international business conduct, particularly with the company’s perception and prestige. Like all businesses, SMEs need capital to start up and continue until they become profitable; once listed, they can access fundraising as required.”
He noted that “in order to make listings more attractive, however, government, regulators, and policymakers should consider policy responses to encourage more Listing, further lowering listing requirements to encourage more participation in the capital market. Furthermore, regulators can reduce transaction and listing costs to attract more SMEs and widen the space. Also, to deepen market participation, government agencies that regulate the market should organise promotional campaigns, public seminars, and conferences to increase public awareness and address potential drawbacks of SMEs from Listing.”
The regulator said it will ensure that the capital market will fill the gaps identified by the players. “We will do our best to ensure the capital market is well positioned to drive economic development. We promise as a team that ‘Time to Market’ will be properly dealt with. Approvals for issuances will be done swiftly so that when companies desire to come to the market, they know exactly what time approvals will be given,” Agama stated.
Earlier, he noted that the SEC is committed to ensuring swift issuance processes for companies wishing to enter the market, with clear timelines for approvals. He assured that the Commission would guide applicants through the process, ensuring timely feedback and transparency throughout.
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