Market awaits NASD OTC as public coys register with SEC

Six months after the National Association of Securities Dealers (NASD) plc identified unlisted securities of no fewer than 237 public limited companies that would shape its Over-the-Counter (OTC) market in 2014, the ongoing registration of these companies by the Securities and Exchange Commission (SEC) has added to this optimism.

Barely four days to the June deadline which the SEC gave all public limited companies (PLCs) in Nigeria to register with the commission, BusinessDay has learnt that many PLCs are making attempts to complete their registration before this date.

The apex regulator of the capital market had disclosed its readiness to sanction erring public companies over this registration exercise, saying it was in line with the provisions of Section 54 (1) of the Investments and Securities Act No. 27, 2007 and Rule 279 (1) (a) of the SEC Rules and Regulations “to the effect that all securities of public companies shall be registered with the commission”.  

The SEC had about five months ago (February 2014) given all public companies in Nigeria up to June 2014 to register with the commission.

Already, participants in the OTC market for equities said the exercise, when completed by next week, would mark the beginning of a new chapter in the growth and development of the capital market in Nigeria.

Preparatory to the opportunities ahead, the NASD plc concluded plans to migrate equities trading from the NASD proprietary platform (BITS) to X-Gen, which is NASDAQ-OMX’s proprietary trading platform that gives stockbrokers the ability to seamlessly switch between trading on the NASD OTC market and the traditional Nigerian Stock Exchange (NSE).

The NASD plc, promoters of the OTC market for unlisted securities, had adopted the internationally-recognised Industry Classification Benchmark (ICB). The ICB is a definitive system categorising over 70,000 companies and 75,000 securities worldwide, enabling the comparison of companies across four levels of classification and national boundaries.

Ahead of SEC deadline, OTC market participants also believe that under these rules, “companies that have more than 50 shareholders or who have registered as a PLC with the Corporate Affairs Commission (CAC) must register shares they issue to investors”.

As part of the capital market regulatory efforts to check exchange of securities through the black market, the OTC market for unlisted securities was officially launched on July 1, 2013 and its activities are regulated by the SEC.

Iheanyi Nwachukwu