NSE completes demutualization process following final approval from SEC and CAC

• Restructures into a Holdco with three operating subsidiaries duly registered with CAC
• Shares of NGX Group Plc will be available for bilateral trades on the NGX Limited

Charles Abuede

In a bid to create new strategic opportunities that will enable it to realise its vision of becoming Africa’s leading capital market infrastructure, the Nigerian Stock Exchange (NSE) has received the final approval from the corporate affairs commission (CAC) and the securities and exchange commission (SEC) in a plan to complete its demutualization process which will see the exchange become a holding company.

The NSE, in a corporate announcement on Wednesday, on its website, said the approvals by the regulatory and registration bodies indicate that the NSE can now activate its Transaction Plan to a new operational structure and a holding company. It further revealed that under the demutualization, the group will operate with three subsidiaries such as Nigerian Exchange Limited (NGX Limited), the operating exchange; NGX Regulation Limited (NGX REGCO), the independent regulation company; and NGX Real Estate Limited (NGX RELCO), the real estate company.

Commenting on the completed process, Oscar Onyema, the new group chief executive officer of the NGX Group plc, stated that the new capital structure will enable the NGX group to form new dynamic partnership and relationships which will gain capital raising flexibility.

“The Nigerian capital markets should play a role commensurate with Nigeria’s status as Africa’s largest economy. At the Nigerian Stock Exchange, we have a vision that the new group will become the premier exchange hub for Nigerian businesses and for the African economy. We are implementing a series of measures towards this goal, demutualisation being a critical milestone. The completion of demutualisation is a truly significant moment, and we welcome the new possibilities that have opened up for us today.”

Also, Otunba Abimbola Ogunbanjo, NSE Council President and the personality who will serve as the inaugural chairman of the NXG group board of directors, said the Transition Plan will also see the inauguration of Boards for each of the new entities, staff reallocation to their respective functions within the operating subsidiaries, operationalisation of business plans and budgets, technology systems transfer, and the requisite arm’s length agreements between the entities.

“Successful demutualisation was one of my fundamental objectives when I assumed the Presidency of The Exchange.  The SEC’s decision today to approve the NSE’s demutualisation plans bring this aspiration to a successful conclusion in a process that included the passage of the Demutualisation Act through the National Assembly. We are elated that this milestone has been achieved as we celebrate the 60th anniversary of the commencement of trading at the Exchange and now look forward to the future public listing of its shares on NGX Limited. On behalf of the NSE, I would like to warmly thank all those that have worked assiduously to achieve this watershed event on our journey to make the NSE a multifaceted exchange that extends across various markets and geographical regions.”

Furthermore, from the announcement by the NSE, the approvals, as received, will also enable the shares of NGX Group Plc, which have been registered with the SEC, to be allotted to the membership pursuant to the Court-approved Scheme of Arrangement.

Meanwhile, the shares of NGX Group Plc will be available for two-pronged trades to be executed in line with extant rules and regulations of the Nigerian capital market, ahead of its listings on NGX limited.