While it is not yet
certain when the planned demutualisation of the Nigerian Stock Exchange
(NSE) would take place this year, some market operators have urged that
the process be transparent to restore investors’ confidence in the
system. Demutualisation is transforming the NSE from being a
self-regulatory organisation to a public organisation. Boniface Okezie,
the national chairman of the Progressive Shareholders Association of
Nigeria, said that without a transparent demutualisation process, “that
will be open to the public, all the messages of restoration of
investors’ confidence that the present administration and its regulator
are talking about will come to nothing.” Dimeji Akintayo, an equity
analyst at Resource Cap, a portfolio management firm, said, “The sale
of the NSE must be transparent because it is important to all of us;
and we must participate,” adding that the same advice was given to
Ndidi Okereke-Onyiuke, the sacked NSE’s director-general, when she also
made the proposal.
Speeding up the process
Emmanuel Ikazoboh,
interim head of the Exchange, had last November, in a broadcast, said
that the demutualisation was not part of the agenda given to him by the
Securities and Exchange Commission (SEC). However, Mr. Ikazoboh said
the he will make a proposal to the NSE council to consider a quick
demutualisation process.
“I had a mandate
when I came into the Exchange. I was to bring back credibility, clean
up the back office, carry out a forensic, bring report out, and then
complete the effect selection process. Demutualisation was not part of
the issues raised. However, in the process of carrying out my
assignment, it is becoming clear to me that it is an area that the
regulator should look at. So it is an issue I will present to the
council,” he said.
He explained that “demutualisation is crucial and should be speedily
done. Whether I am going to do it or my successor will do it, I cannot
say for now. But looking at the World Federation of Exchanges, what we
discovered during our effort to get a full membership was that most of
the entities that have been admitted as full members are all
demutualised. Therefore, one of the issues I am going to present to the
council is that we should try and fast track the process. I think it
will be good for the exchange and solve a lot of naughty issues which
we presently have at the exchange.” Speaking recently on
demutualisation, Arunma Oteh, director-general of the SEC, said,
“Demutualisation is a public interest issue because it affects the
marketplace where investors trade their securities.” Ms. Oteh said the
Exchange Commission is “reviewing what happened in other jurisdiction
and will work on implementing world class standard including a risk
base approached for minimum capital base requirement.” Abdul Razaq, the
former president of the NSE, was the first to propose in June 2002 that
the NSE be demutualised. Mrs. Okereke-Onyiuke later represented the
proposal in 2008 but was stepped down because of the global market
downturn.
