SEC Issues Guidelines For N500bn Bank Recapitalisation

The Securities and Exchange Commission (SEC) has unveiled a robust framework aimed at facilitating the smooth implementation of the bank recapitalisation programme.

 Published on the SEC’s official website on Friday, the SEC said the  framework is designed to ensure transparency, efficiency, and accountability throughout the capital-raising process for banks and holding companies participating in the 2024-2026 recapitalisation period.

Recalled that the  Central Bank of Nigeria’s directive, issued on March 29th, necessitates international banks to raise their capital base to N500 billion, national banks to N200 billion, and regional banks to N50 billion. 

This initiative  was said to have aimed at   bolstering  the resilience of Nigeria’s financial sector against potential risks and to support economic growth initiatives in alignment with the government’s aspirations of achieving a $1 trillion economy by 2030.

The SEC’s guidelines specify the procedures and requirements banks must adhere to when raising capital through rights issuances, private placements, or other approved methods. 

Crucially, the framework emphasizes the importance of transparency and protection of stakeholders’ interests throughout the capital-raising process.

“This framework would help to ensure that the capital raising process is conducted efficiently, transparently, and in a manner that protects the interests of all stakeholders,” stated the SEC in its official announcement.

Key provisions of the framework include streamlined procedures for application submission, requiring all documents to be filed electronically via the dedicated email address, 

The SEC will promptly review submitted materials and communicate any identified deficiencies electronically to applicants, who must address these promptly to avoid delays in the approval process.

The SEC also highlighted penalties for incomplete applications, stating, “Where an application is returned for being incomplete – a penalty of N1,000,000 and a re-filing fee of N100,000 shall apply,” underscoring the importance of accuracy and completeness in initial submissions.

Moreover, the framework builds upon existing regulatory provisions under the Investment and Securities Act, 2007, and the Commission’s Rules and Regulations.

 It allows for previously submitted documents, such as Memoranda and Articles of Association, to be referenced in subsequent transactions provided there are no changes.

In further clarifying its role, the SEC emphasized its commitment to supporting the capital market’s pivotal role in facilitating the bank recapitalisation programme. 

The commission encourages proactive engagement from banks and stakeholders, inviting inquiries and clarifications through the dedicated email address.


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