By Chinyere Joel-Nwokeoma
The Nigerian Stock Exchange (NSE) has been given the final approval by the Securities and Exchange Commission (SEC) and the Corporate Affairs Commission (CAC) for its demutualisation exercise.
The NSE said in a statement on Wednesday obtained by the News Agency of Nigeria (NAN) In Lagos that the demutualisation process had been completed with these final approvals.
NAN reports that under the demutualisation plan, a new non-operating holding company, the Nigerian Exchange Group Plc (‘NGX Group’) has been created.
The Group will have three operating subsidiaries: 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 statement said all the entities had been duly registered at the CAC.
Commenting on the development, the NSE Council President, Otunba Abimbola Ogunbanjo, commended SEC for approving the demutualisatiom plan.
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.”
Also speaking, Mr Oscar Onyema, the new Group Chief Executive Officer of NGX Group Plc, said: “The Nigerian capital markets should play a role commensurate with Nigeria’s status as Africa’s largest economy.
Onyema said the new group would become the premier exchange hub for Nigerian businesses and for Africa.
“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 toward 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,” he added.
NAN reports that the approvals by the SEC and CAC signify that the NSE can now activate its transition plan to a new operational structure and holding company.
The extensive Transition Plan, 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 Transition Plan will also see the inauguration of boards for each of the new entities and relocation of staff to their respective functions within the operating subsidiaries.
It would also see to the operationalisation of business plans and budgets, technology systems transfer and the requisite agreements between the entities.
The approvals 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.
Ahead of its listing on NGX Ltd., 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. (NAN)