CAC unveils new guidelines for bank recapitalization
By Esther Agbo
The Corporate Affairs Commission (CAC) has issued new guidelines for the recapitalisation of banks and other financial institutions, aiming to streamline processes and ensure compliance with regulatory standards. This development comes under the authority of Section 8(1)(e) of the Companies and Allied Matters Act (CAMA) No. 3 of 2020.
The guidelines encompass three primary areas: new incorporations, increases in share capital, and mergers. For new incorporations, the CAC mandates requirements such as an approved name reservation, an approval-in-principle from the sector regulator, and the completion of an online incorporation form. The CAC has committed to issuing a certificate of incorporation within 24 hours for applications that meet all prescribed requirements.
When it comes to increasing share capital through private placements, rights issues, or offers for subscription, companies must submit several documents. These include a duly signed company resolution, return of allotment, and statutory declarations verifying that the issued share capital is fully paid-up.
Additionally, companies must provide an affidavit by a director confirming that regulatory approval is required for the increase, amended memorandum of association reflecting the new share capital, payment of stamp duties and filing fees, issuance of letter acknowledging notice of increase and requirements of regulatory approval, filling of regulatory approval.
The CAC guarantees the issuance of a certificate of increase within 24 hours of filing the regulatory approval, provided all conditions are satisfied.
However, the notice confirming that regulatory approval is required must be submitted in compliance with Section 127(3), (4), and (5) of CAMA, with annual returns and details about individuals and significant control must be kept current.
For mergers, the guidelines require a duly signed special resolution for the merger from each participating company, a scheme of merger approved by the Securities and Exchange Commission (SEC), and a certified true copy(CTC) of the court order authorising an extraordinary general meeting for each merging company.
Furthermore, evidence of the court-ordered meeting’s publication in two newspapers and the Federal Gazette and CTC of court order sanctioning the scheme of merger is necessary.
In the case of upgrades and downgrades of licence authorizations, no consequential filing is required. The CAC has also provided contact details for enquiries and complaints, urging stakeholders to direct their queries to [email protected] or call +2348169209551.
These guidelines are part of the CAC’s ongoing efforts to enhance transparency and efficiency in the financial sector, ensuring that banks and financial institutions operate within a well-defined regulatory framework.
