There are preparations and plans which have been held to launch the electronic offering of shares, and some other securities in the Nigerian capital market in the first quarter (Q1) of 2019.
Under the electronic initial public offering (e-IPO), and some other electronic public offers, the investors will derive allotment and value for their subscriptions within 7 days; as against the current cycle of getting allotment for nearly four months.
The Sky Aviation Handling Company (SAHCO) Plc, after opening an application list for its IPO on the 12th of November 12, 2018, indicated that the issuance process would be completed in March 2019 with the listing of other shares on the Nigerian Stock Exchange.
According to the information gotten from the sources gathered by our correspondents, it was indicated that the full automation of the offering may take off by the middle of the first quarter of next year.
Actualising this goal will involve automation of the process, documentation, approval, subscription and allotment of all issues, especially the IPOs and public offers. With this initiative being in place, the investors will be able to subscribe and make payment for IPOs on the internet and make payments for public offers online. Such orders would be matched, and allotted electronically, and directly to the investment accounts of investors at the Central Securities and Clearing System (CSCS), and other designated clearing centres.
The full automation will allow the primary market to operate within it’s designated transaction cycle; possibly within the T+3 four-day trading cycle which is being operated at the secondary market.
The Acting Director-General of the Securities & Exchange Commission (SEC), Mary Uduk has confirmed that the SEC expects the committee working on the e-IPO to submit a report by the end of this month. Ms. Mary Utuk said that after examining the report of the committee, the Commission would then develop rules and issue guidelines for the e-IPOs.
Some information gotten from anonymous sources said the initial guidelines, and draft rules might be ready by early next year. Then, the rules department of Securities and Exchange Commission (SEC) will subject the draft guidelines, and set rules to public scrutiny and stakeholders’ review. Such public exposure and review normally takes place for a period of at least two weeks; this is after which the Commission would review the comments and make necessary corrections and adjustments to its final copy.
The rules would be presented to the board of the Securities and Exchange Commission, (SEC) for its final approval, in consultation with the Federal Minister of Finance, whose ministry oversees the overall activities of the Commission. The Securities and Exchange Commission, (SEC) has no board and such rules will be directly submitted to the Federal Ministry of Finance for her approval, and concurrence. After the approval has been given, the Commission will publish the final rules, and mark out a date for the take-off for the implementation of the rules.
This move would instill more efficiency and transparency in the activities and dealings in the Nigerian capital market.