Nigerian Capital Market Update
Nigerian Capital Market Update - September 2020
pwc
NSE Demutualisation
Launch of NSE Growth board
SEC Crowd funding rules
CAMA 2020: legal
framework for derivatives
Overview
Equities market
Debt market
Commercial papers
Nigerian capital market: summary
of major events year-to-date
What lies ahead
Following the SEC's "No
Objection" on the planned
demutualization of the
NSE, members of the
Exchange approved a
scheme of arrangement
that will see the NSE
metamorphosed into a
non-operating holding
company with three
subsidiaries charged with
the trading operations,
self-regulatory function,
and investment business
of the Exchange.
The NSE will be the third
demutualized exchange in
Africa, with Johannesburg
Stock Exchange and
Nairobi Stock Exchange
demutualized in 2006 and
2014 respectively.
The NSE launched the
Growth Board in January
2020 aimed at replacing
the Alternative Securities
Market (ASEM). The
Growth Board is set to
provide the much needed
flexibility to SMEs and
fast growth companies
that are looking to raise
long term capital through
the market as well as
facilitate liquidity for their
shares.
In a bid to create a
structure and framework
for crowdfunding
activities in Nigeria, the
SEC released proposed
rules for the regulation of
crowdfunding activities.
This is expected to drive
investor confidence and
provide a structured
platform for start-ups to
access funding.
With the right
implementation strategy,
crowdfunding has the
potential to complement
public market listings as
most successful startups
will consider going public
at some point in their life
cycle.
The signing into law the
Companies and Allied
Matters Act 2020
provided the necessary
legal backing for the
development of the
derivatives market in
Nigeria with the
introduction of the netting
concept as it relates to
qualified financial
contracts.
This new CAMA
provision, which is in line
with international best
practice, ensures
Nigeria's participation in
the global derivatives
market valued at over
$600 trillion and it is
expected to drive liquidity
in the Nigerian capital
market as well as provide
investors with effective
risk management tools.
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Nigerian capital market update - September 2020
PwC
September 2020
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