Central Bank of Nigeria,CBN, Ministry of Finance and other financial institutions have endorsed plan by the National Assembly to demutualized Nigerian Stock Exchange (NSE).The bill entitled: Demutualization of the Nigerian Stock Exchange (2017) is to enable the conversion and re-registration of the Exchange from a company limited by guarantee to a public company limited by shares.
Speaking in support of the bill during a one day Public hearing organised by Joint Committee of National Assembly on Capital Market, the Governor of Central Bank (CBN) Godwin Emefiele said the Demutualization of Nigerian Stock Exchange would bring NSE within the league of 56 out of 64 members of World Federation of Exchanges which have demutualized. Emefiele, who was represented by Mr. Adedeji Lawal from Legal Department of CBN said dynamism presented by demutualized exchange would augment Nigeria’s debt profile and Capital raising capabilities by providing a number of attractive vehicles for foreign and domestic investors. CBN submitted that the Capital Market and Money Market are dependent on each other therefore efforts aimed at improving the operations of the Market would invariably make a positive impact on the Money Market.
Also, in his presentation Chief Executive Officer, Nigerian Stock Exchange, Mr. Oscar Onyeama who enumerated benefits of Demutualization NSE said the proposed bill would facilitate the development of Nigeria’s Capital Market by enabling the conversion and re-registration of Nigeria Stock Exchange from a company by limited guarantee to a public company limited by shares. Onyeama added that NSE believes demutualization of the exchange through this bill is the great game changer the country needs. Part of the benefits of demutualization according to Onyeama, are facilitation of the development of Capital Market, improved Corporate Governance, Resources for Capital investment and increase global brand and visibility of the Exchange. Also, the Ministry of Finance and the Association of Stock Brokers of Nigeria welcomed the planned bill, pointing out that it will provide access to global capital market.
Declaring the public hearing open, Senate President, Bukola Saraki who was represented by Senate Deputy Whip, Francis Alimikhena said the bill is one of the instruments the 8th National Assembly hopes to use to stimulate Nigeria’s economic growth. Minority Leader, House of Representatives, Hon. Leo Ogor who represented the Speaker Yakubu Dogara pledged the commitment and total support of the National Assembly for the bill which he said would scale up the efficiency of the NSE.
Addressing the gathering, Chairman, Senate Committee on Capital Market, Foster Ogolar said demutualization holds the key to develop and strengthen the Capital Market. “The Nigerian Stock Exchange plays a major role in the Nigeria’s financial market and its conversion and re-registration into a public company by shares is essential to develop and strengthen the Nigerian Capital Market”, he said.
The Nigerian Stock Exchange was incorporated in September 1960 as a private company limited by guarantee and having share capital.
It was re-registered as a company limited by guarantee with no share capital in 1990.through a Bill for an Act to facilitate the development of Nigeria’s capital market.