The Nigerian Stock Exchange (NSE) has received the approval of the Securities and Exchange Commission (SEC) to implement the amended Dealing Members Rule(s) 7.4 and 7.5. SEC approved the amendments to Dealing Members’ Rules (Part XIIB) on November 9, 2018 while it becomes effective on November 19, 2018, according to a notice signed on November 16 by Tinuade T. Awe, Executive Director, Regulation, NSE.
The amended Rule 7.4 in the NSE Rule Book for Dealing Members refers to submission of financial and non-financial reports to the Exchange while that of Rule 7.5 refers to extension of time for submission of audited financial statements, and quarterly returns.
Under the amended Rule 7.4, every Dealing Member is now required to submit to the Exchange its audited annual financial statements, within ninety (90) calendar days of the end of the fiscal year, and its quarterly financial statements returns within thirty (30) calendar days of the end of the quarter; and any other periodic report within the period stipulated by The Exchange.
It also requires that all their financial statements be prepared in accordance with the requirements of the International Financial Reporting Standards (IFRS) applicable to the period covered in such financial statement(s).
The Exchange said it shall communicate the need for submission of any other periodic financial report to Dealing Members through its circular to the market.
“If a Dealing Member fails to comply with this provision, it shall be liable to the following penalties which are subject to review by Council and any change thereto shall be made public by way of a Circular”, according to NSE.
For instance, failure of a Dealing Member to submit quarterly returns on the date due for submission shall attract a penalty of N5, 000 per day of default, and the Dealing Member shall be suspended from trading with effect from the first trading day after the due date.
Also, failure of a Dealing Member to submit audited financial statements on the date due for submission shall attract a penalty of N5, 000 per day of default for a maximum of four (4) weeks.
Where a Dealing Member fails to submit its audited annual financial statements after four (4) weeks of default, the Dealing Member firm shall be suspended from trading forthwith.
Failure of a Dealing Member to submit any other periodic reports on the due date for submission shall attract a penalty of N5, 000 per day of default for a maximum of four (4) weeks.
Where a Dealing Member fails to submit the periodic report after four (4) weeks of default, the Dealing Member firm shall be suspended from trading forthwith.
Where a Dealing Member is suspended from trading under the above circumstances such suspension shall be lifted upon submission of the quarterly returns, or audited financial statements or other periodic reports.
On amended Rule 7.5, where appropriate, a Dealing Member is now required to apply for an extension of time for the submission of its quarterly returns, or audited annual financial statements.
“Such application for extension shall be made no later than two (2) weeks before same is due and such Dealing Member shall be expected to give reasons for requesting the extension”, the NSE stated.
The decision to grant a Dealing Member’s request for an extension of time under the above sub-article shall be entirely at the discretion of the Exchange and such extension shall in no event be longer than a period of four (4) weeks from the due date for submission for quarterly returns, and eight (8) weeks for audited financial statements.
Where a Dealing Member fails to submit its quarterly returns or audited annual financial statements at the expiration of the extended period granted, the Dealing Member shall be suspended from trading forthwith, the NSE noted.
Where a Dealing Member is suspended from trading pursuant to Rule 7.4, such suspension shall be lifted upon submission of the quarterly returns, or audited annual financial statements.
Though it was noted that the penalties stated above are subject to review without notice by Council and any change thereto shall be made public by way of a Circular.
Iheanyi Nwachukwu
