SEC Nigeria tightens requirements for bonds, commercial paper issuances

BY: CHARLES ABUEDE

The Securities and Exchange Commission (SEC) said that it would require issuers to obtain and submit a ‘Letter of No Objection’ from their respective regulators when filing applications for issuances, including bonds, commercial papers, rights issues, and others.

The capital market regulator said the move is aimed at boosting the integrity of capital market instruments. It also said the move has become necessary in a bid to further improve its transaction turn-around period.

SEC in an issued circular, noted that ‘Letter of No Objection’ 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,” a part of the notice emphasised.

“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,” it stated.