Precisely on Tuesday, March 26, 2013, the Nigerian Stock Exchange (NSE) launched the ‘X-Issuer,’ which is the first ever “Issuers Portal” in the Nigerian capital market.
The Issuers Portal is an on-line tool created by the Exchange for mandatory use by all issuers for tendering information required to be submitted to the Exchange, in accordance with the Listings Rules of the Exchange.
It is one of the initiatives of the Exchange targeted at motivating transparency in the market and boosting trade activities; bridging the information gap between listed companies and the capital market, and enabling all stakeholders build and grow their businesses.
Who are Issuers?
Issuers are legal entities that have been admitted to the Exchange’s Daily Official List and have agreed to comply with the Exchange Listing Requirements, the relevant provisions of the Companies and Allied Matters Act Cap C20 LFN 2004, the Investment and Securities Act, 2007, Rules and Regulations made there under and all other relevant statutory and other instruments.
Bringing rule on board and ensuring its adherence
Two days after the launch, the Council of the Exchange approved a set of the Issuers Portal Rules (the Rules) – which make use of the Issuers Portal mandatory for all issuers. Though, these rules are subject to approval of the Securities and Exchange Commission (SEC), according to Tinuade Awe, head, legal and regulation division, NSE; the objectives include entrenching high standards, organisation and control in the submission and dissemination of all company information intended for release to the market in compliance with the Listings Rules.
Interestingly, array of sanctions would be trailing issuers for violating the ‘Issuers Portal’ rules. According to the NSE, “in the event of any breach of the Issuers Portal Rules set forth in Paragraphs 3 and 4 of the rules governing use of the portal, the issuer shall be liable to pay a fine of 50 percent of its annual listing fee.”
Paragraphs 3 and 4 of the rules governing use of the portal has to do with notification and communication with the Exchange via the Issuers Portal, and issuer to exercise reasonable care in relation to any submission.
Another sanction relates to the event of any breach of the portal’s Rules set forth in Paragraphs 7 and 8 above, the issuer shall be liable to pay a fine of 50 percent of its annual listing fee. Paragraphs 7 and 8 of the rules governing use of the portal respectively has to do with requirements for information submitted via the Issuers Portal, and financial reporting (periodic/structured disclosure).
Also, if an issuer fails to submit the information set forth in Paragraphs 1c and 1d of the rules governing use of the portal via the Issuers Portal, the issuer shall be liable to pay a fine of 50 percent of its annual listing fee. Paragraphs 1c of the rules has to do with Periodic/Structured Disclosures are all financial notifications including: Financial Statements (both audited and unaudited); Earnings Forecast; and Corporate Actions, and Paragraphs 1d explains that continuous disclosures are notifications of material information including: Notice of Annual General Meeting; Notice of Board Meeting; Notice of Change of Auditors; Notice of Change of Company Secretary; Notice of Change of Name and Registered Address; Notice of Change of Registrars; Notice of Completion Board Meeting; Notice of Court Ordered Meeting; Notice of Directors Dealings; Notice of Extra-Ordinary General Meeting, and Notice of Resignation and Appointment of Directors.
Companies input necessary
In an effort to create public awareness and solicit the public’s feedback on the Rules as well as improve the Rules where necessary and thereby have a robust, well-drawn up set of Rules, the Exchange currently invites comments from issuers on some of the rules.
“We are particularly interested in your comments on Article 3, most especially 3(b) and 3(c),” the NSE said. Article 3 has to do with notification and communication with the Exchange via the Issuers Portal.
Article 3(a) says: “The only representatives of an issuer authorised to use the Issuers Portal to submit information to The Exchange are the Company Secretary (and his or her designee) and the Chief Financial Officer of the Issuer.” Article 3 (b) says: “Issuers that outsource the company secretarial function to a separate entity distinct from the Issuer shall designate one representative of such separate entity to The Exchange, which person shall act as the Company Secretary for the purposes of this rule no later than 5 (five) business days before the designee uses the Issuers Portal for the first time.” Article 3(c) says: “An Issuer may not designate as Company Secretary pursuant to paragraph 3b a person who has already been designated as Company Secretary by another Issuer.”
One of the goals of the Exchange here is to forestall sensitive information from being abused by an individual who has been designated as company secretary to more than one issuer; and another goal is to be able to identify and hold specific persons accountable for information provided via the Issuers Portal on behalf of issuers.
IHEANYI NWACHUKWU
