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Nigeria: History As Nigerian Stock Exchange Completes Demutualisation

nigeria history as nigerian stock exchange completes demutualisation

The Nigerian Stock Exchange (NSE) has received final approvals of its demutualisation plan from the Securities and Exchange Commission (SEC) and Corporate Affairs Commission (CAC) leading to the completion of the exchange’s demutualisation process.

Under the demutualisation plan, a new non-operating holding company, the Nigerian Exchange Group Plc (NGX Group) has been created with three operating subsidiaries. The subsidiaries are: Nigerian Exchange Limited (NGX Limited), that will be the operating exchange; NGX Regulation Limited (NGX REGCO), the independent regulation company; and NGX Real Estate Limited (NGX RELCO), the real estate company.

Preparatory to the receipt of the final approvals from SEC and CAC, the NSE council last January announced the appointment of the current Chief Executive Officer (CEO) of the NSE, Mr. Oscar Onyema as the Group CEO of the NGXG; Mr. Temi Popoola, who is currently the Managing Director of Renaissance Capital, as the CEO of NGX, while Ms Tinu Awe, who is currently the Executive Director, Regulation of NSE, will become the CEO of NGXREGCO.

Commenting on the development, NSE Council President, Otunba Abimbola Ogunbanjo, said: “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 brings 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.”

In his comments, Onyema said: “The Nigerian capital markets should play a role commensurate with Nigeria’s status as Africa’s largest economy. At the NSE, 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.”

According to exchange, the approvals by the SEC and CAC signified that it could now activate its Transition Plan (TP)to a new operational structure and holding company.

“The extensive TP, taking the group and its subsidiaries through to full operational launch, covers legal and practical changes to enable the functioning of the new corporate structure, with no loss of service and a seamless transition for market participants. The TP 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. Upon operational launch, the group’s new brands, including a new website, will be unveiled and the group will be in position to execute on its strategic vision. Stakeholders, including our new valued shareholders will benefit from the group’s enhanced corporate governance framework, access to capital to fund strategic developments and a more globally competitive exchange,” NSE said.

According to the exchange, the approvals 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.

“Ahead of its listing on NGX Limited, the shares of NGX Group Plc will be available for bilateral trades to be executed in line with extant rules and regulations of the Nigerian capital market. Otunba Ogunbanjo will serve as the inaugural Chairman of NGX Group Plc’s Board of Directors,” it explained.

Demutualisation of the NSE has been seen as very pivotal because it creates new strategic opportunities that will enable the group realise its vision of becoming Africa’s leading capital market infrastructure provider. The creation of a holding company and a new capital structure will also enable NGX Group Plc to form new dynamic relationships, drive strategic partnerships and gain capital raising flexibility. The NSE members approved at its last AGM, the listing by introduction of NGX Group Plc on NGX Limited.