BY MICHAEL EBOH
The Securities and Exchange Commission (SEC) has announced a new requirement for listing on the Nigerian capital market, declaring that, henceforth, companies seeking listing on the Nigerian Stock Exchange (NSE) must adopt the International Financial Reporting Standards (IFRS).
Speaking during the commemoration of 50 years of trading on the Nigerian Stock Exchange (NSE), in Lagos, Monday, Director-General, SEC, Ms Arunma Oteh disclosed that the adoption of IFRS is in addition to other corporate governance, committees and Board issues which the companies are expected to put in place before they are granted the approval to list.
According to her, SEC is already talking to a number of companies in the telecommunication sector, oil and gas sector and in other key sectors in the economy on the need and benefits of listing on the NSE.
She stated that in the meetings with companies, SEC has gotten useful feedback on how best to encourage companies to list and on ways to deepen the capital market.
He noted that SEC’s major concern is the adoption of strict corporate governance principles and internationalisation of the companies, through ensuring that listed companies embrace international best practices in their activities and operations.
She said, “Any company thinking of listing on the NSE, the company must have to start preparing its financials and the companies are expected to adopt the International Financial Reporting Standards (IFRS) in the presentation of their audited financial statements. This is in addition to other corporate governance issues, around the role of the Board, around the committees, Audit and finance committees and focus on risk management. Ensuring that there is clarity on the role of the board, clarity on the role of the executive, checks and balances that are required in this respect, among others.
Also speaking, Interim President of the Council of the NSE, Mallam Ballama Manu harped on the need to deepen the capital market, calling on the federal government to put in place steps to encourage more companies in sensitive sectors of the economy to list on the NSE.
He called for a re-packaging of Federal Government of Nigeria (FGN) Bonds for trading on the NSE so as to encourage participation by retail investors.
“These investors,” he said, “are currently excluded from trading in the FGN bonds due to their smaller financial muscle. We have commenced discussions with relevant agencies of Government to find a structure that would accommodate them.”
Speaking further, he said, “We are aware that listing on any exchange is not by compulsion and that the NSE needs to have the highest level of integrity and invest in people, processes and technology to achieve durable wealth creation and market leadership.
“We are delighted to inform you that in this respect, we are progressing with a major transformation that will enable us to once again play a pivotal role in the economic development of this country.
We are poised to achieve our aspiration of becoming the gateway to the African frontier markets. “Significant investment is being made to improve our operational efficiency, through the introduction of new products and leveraging on latest technology. We are also actively engaging our broader stakeholder groups to re-build the much needed market confidence.”