Bill on stock market restructuring passes second reading

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ABUJA, JULY 26, 2017 – A bill seeking to allow the re-registration and conversion of the Nigerian Stock Exchange from a company limited by guarantee to a public limited company by shares passed the second reading at the Senate on Tuesday.

Sponsor of the bill, otherwise called the De-mutualisation Bill, Senator Foster Ogola, said the NSE as currently constituted was not made to make profit.

Ogola, who is the Acting Chairman, Senate Committee on Capital Markets, said the proposed de-mutualisation of the exchange was an integral element of the 10-year Capital Markets Master Plan, meant to drive rapid growth of the market over the next decade.

The lawmaker said the proposed law would increase the value of the Exchange, enabling it to compete favourably in the global markets, open the doors for significant investment in Nigeria and enhance the nation’s capital market.

He stated, “The de-mutualisation of the Exchange will bring the Nigerian capital market at par with other international jurisdictions; result in enhanced governance, transparency and visibility, whilst attracting strategic partners, investors and good quality issuers.

“The approval of the de-mutualisation bill will generate substantial motivation for the development of an agile Exchange, thereby consolidating its innovativeness and strengthening its leadership both at local and international levels, as well as adding value to its stakeholders.

“As a de-mutualised entity that is profit-seeking, the NSE will be in a better stead to capitalise on new income opportunities, free from any limitations arising from conflicting member interests and existing laws, and more importantly be able to better support the economic growth of Nigeria.”

Supporting the bill, Senator Mao Ohuabunwa, said the de-mutualisation plan, when implemented, would give the NSE the ability to take a number of strengthening actions that would promote transparency and increase efficiency in its operations

“The de-mutualisation holds a number of significant benefits for Nigeria’s economy, including augmentation of Nigeria’s debt profile, increase capital raising capabilities, capital support for government initiatives, attraction of foreign and local investors, and assisting corporate and financial institutions to raise capital,” he said.

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