Demands ‘No Objection’ letter from issuers

By Nkiruka Nnorom

The Securities and 
Exchange Commission (SEC) has said that issuers of securities in the capital market will, henceforth, be required to obtain the reference letter of ‘no-objection’ from their respective primary regulators as a prerequisite for the Commission’s approval of the proposed transactions.

The Commission stated this in a circular to the issuing houses,  saying that the requirement  is particularly applicable to issuers in the banking and insurance sectors. According to the Commission, the move has become necessary in a bid to further improve the Commission’s transaction turn-around period and enhance integrity of capital market instruments.

The Circular reads in part, “The Commission hereby draws the attention of issuing houses to the due diligence requirement for a no-objection letter from primary regulators of issuers, especially those in the banking and insurance sectors, as a prerequisite for the Commission’s approval of proposed transactions.”

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The SEC further stated that the ‘no objection’ letter should cover confirmation that there has not been any material change(s) in the financial statements of the issuer/sponsor from the last accounting year end to date; names of current members of the Board of Directors; and no objection to the proposed issuance. 

“Please be informed that where in relevant instances, an application is not accompanied by a letter of no objection, such submission will be considered to be incomplete and would not be processed,” the Commission added.

Vanguard News Nigeria