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NSE Demutualization Will Provide an Avenue for the Exchange to Achieve Greater Efficiency

Mar 11, 2021   •   by   •   Source: Proshare   •   eye-icon 830 views

Thursday, March 11, 2021  / 2:44PM / By CSL Research / Header Image Credit: NSE


Proshare Nigeria Pvt. Ltd.


Yesterday, theNigerian Stock Exchange (NSE) completed its long-awaited demutualization aftergetting the approval of the Securities and Exchange Commission (SEC) andCorporate Affairs Commission (CAC). The demutualization exercise is expected toproduce a new non-operating holding company with three operating subsidiaries.The subsidiaries are Nigerian Exchange Limited (NGX), NGX Regulation Limited(NGX REGCO), and NGX Real Estate Limited (NGX RELCO), saddled with operating,regulating, and acting as the real estate arms of the Exchange, respectively.

 

The NigerianStock Exchange (Formerly Lagos Stock Exchange) was founded on the 15 September1960 and began operations on 25 August 1961. In a bid to catch up with theneeded efficiency to take its place as the leading Exchange on the Africancontinent, members had agreed at an Extra-ordinary General Meeting in 2017 todemutualize the Exchange. A decision that became more pronounced as thedemutualization bill became law in August 2018. Demutualizing the Exchangechanged it from its earlier status as a non-profit organization limited byguarantee into a public company.

 

According to theGroup Chief Executive Officer, Mr Oscar Onyema, 'The Nigerian capital market should play a role commensurate with Nigeria's status as Africa'slargest economy. At the Nigerian Stock Exchange, we have a vision that the newGroup will become the premier exchange hub for Nigerian businesses and for theAfrican economy. We are implementing a series of measures towards this goal, demutualizationbeing a critical milestone. The completion of demutualization is a trulysignificant moment, and we welcome the new possibilities that have opened upfor us today.'

 

In our view, the exercise willprovide an avenue for the Exchange to achieve greater efficiency in all itscore activity areas. The Group's listing on the Exchange makes the currentownership stakes tradable while also providing an avenue for Capital (Equity orDebt) raise should the company need financing. Furthermore, the Group'sincorporation would subject it to more public scrutiny, a factor that we expectwould engender better corporate governance and better reporting standards. Thecompany plans to invest in the necessary infrastructure to lower trading cost,improve real-time access to deals matching and reduce system downtime.

 

Proshare Nigeria Pvt. Ltd.

 

Proshare Nigeria Pvt. Ltd.


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Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

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