The Securities and Exchange Commission has exposed new rules on Shariah Advisory Services for non-interest capital market products and services.
According to the SEC, Shariah governance is crucial considering that compliance with Shariah rules and principles is important in Non-interest Capital Market operations/transactions.
“The provision of the rules is in line with local and international best practices. The regulatory organization in the Nigerian Financial System such as CBN, NAICOM had issued such guidelines to provide clear and good Shariah governance in their respective sectors.
“Making the Shariah Advisory service a registrable function in the market will assist in effective implementation of the proposed consolidation of the Shariah governance rules and will also be an additional source of revenue to the Commission,” the Commission stated.
The Commission stated that the Non-interest Capital Market activities in recent times are exponentially increasing as the market is witnessing the entrance of more asset managers, emergence of i-REIT, listing of sovereign Sukuk on the Exchanges, issuance of corporate Sukuk, emergence of shariah advisory function etc.
“These developments coupled with the necessity of shariah services for the market affirms the critical need for a framework/guideline to set a minimum standard for persons (corporate or individual) seeking to provide shariah advisory services for Non-Interest Capital Market activities.
“The guideline is essential for the development of this nascent sector, as it will promote transparency and confidence, whilst creating a level playing field for all participants in the market.
“Further to the above, the Commission stated that a review exercise on the its existing Rules on shariah governance undertaken by the Standing Committee of Deepening Non-interest Capital Market led to the recommendation that rules be drafted to provide for the registration and regulation of shariah advisory services in line with international best practices. Hence, the proposed Rules for Shariah Advisory Services for Non-Interest Capital Market Products and Services.
“Going by the Rule, an issuer or fund manager with the consent of the trustee (where applicable) shall appoint a Shariah Adviser to provide Shariah Advisory services for Shariah products, issuances and schemes.
“A capital market operator seeking to provide Shariah compliant products and services shall appoint a registered Shariah Adviser for the firm and notify the Commission of such appointment within five (5) business days of the appointment.
“The rule stipulates that the SEC may register a Shariah Adviser or renew the registration of a registered Shariah Adviser subject to the applicant satisfying some criteria.
“An individual eligible to provide Shariah Advisory services under these rules shall satisfy the following requirements: Possession of a minimum of a Bachelor’s degree in Shariah, which includes study in Usul Fiqh (principles of Islamic jurisprudence) or Fiqh Muamalat (Islamic transaction/commercial law) or a person with vast knowledge in Usul Fiqh (principles of Islamic jurisprudence) or FiqhMuamalat (Islamic transaction/commercial law) acquired through Islamic system of education: Ability to read and write in Arabic and English Language respectively and Possession of basic knowledge of business or finance particularly in Islamic finance and capital market.
“On experience, the applicant is expected to: Have at least two years of relevant experience in Islamic finance; or have at least one year of relevant experience in Islamic finance and have attended at least five relevant Islamic finance courses/workshops.
“The Rule also states that the roles and responsibilities of a Shariah adviser shall include: Advising on all aspects of the Non-Interest Capital Market Products and Services including documentation and structuring;
“Issuing Shariah certification which outlines the basis and rationale of the structure and mechanism, the applicable Shariah principles used and relevant Shariah matters relating to the documentation of the Non-Interest Capital Market Products and Services; Providing Shariah expertise/guidance on all matters, particularly on investment instruments and Reviewing compliance reports of the Shariah product’s proceeds utilization (where applicable) to ensure that investment activities are Shariah compliant.
“Other roles and responsibilities are: Providing a periodic report to the trustees certifying whether Sukuk proceeds, Islamic fund or any other Non-Interest Capital Market products have been managed/administered in accordance with Shariah principles and rules; Ensuring that the applicable Shariah principles and any relevant resolutions and rulings endorsed are complied with; Applying ijtihad (where applicable) to ensure all aspects of the Non-Interest Capital Market products comply with Shariah principles; and accountability for the quality, accuracy and soundness of his own decision or advice.
“The Rule also places some restrictions as a Shariah adviser cannot accept any appointment in more than one registered Islamic Fund Management Company/Fund Management company offering Islamic products provided that the Shariah Adviser could serve in multiple Fund Management Companies with the consent of the Fund Managers, Trustees, and prior approval of the SEC.
“Also, a Shariah Adviser shall immediately disclose to the Commission, Issuing House or Fund Manager any circumstances that may affect his ability to meet any of the requirements of the rule.
“Registered Shariah Advisers shall be exempted from appointing compliance officers as required under the Commission’s Rules and Regulation on Appointment of Compliance Officers.”
Naira depreciates to N1,170/$ in parallel market
The Naira on Monday depreciated to N1,170 per dollar in the parallel market from N1,166 per dollar last week Friday.
Data from FMDQ showed that the indicative exchange rate for NAFEM fell to N837.77 per dollar from N927.19 per dollar last week Friday, indicating N89.42 kobo appreciation for the naira.
The Naira appreciated to N837.77 per dollar in the Nigerian Foreign Exchange Market (NAFEM) yesterday.
The volume of dollars traded (turnover) on NAFEM fell by 32.8 percent to $73.93 million from $110.14 million last week Friday.
As a result, the gap between the official and parallel market exchange rates widened to N332.23 per dollar yesterday from N238.81 per dollar last week Friday.
Stock market plummets with investors losing N258.85bn
Trading yester day at the Nigerian equities market closed negatively for the new week. This is as the NGX Market CAP also recorded a loss of N258.85bn in Naira terms.
UNIVINSURE had the highest volume contribution with 16.42 percent, while TRANSCORP and GTCO followed closely.
According to the value chart, AIRTELAFRICA is at the top with a 46.04 percent contribution while GTCO and ZENITHBANK followed closely behind
The NGX All-Share Index (ASI) declined by 0.66 percent, closing at 70,946.83 basis points, compared to the previous day’s gain of 0.08 percent, which closed at 71,419.87 basis points.
The NGXASI now stands at 38.43 percent.
Meanwhile, the total volume traded declined by 0.72 percent to close at N358.53m, valued at N7.10bn and traded in 6,433 deals. UNIVINSURE was the most traded stock by volume with N58.85m, while AIRTELAFRI was the most traded stock by value with N3.27bn units traded.
The Gate Index declined by 0.04 percent to close at 183.36, while the Toni index advanced by 0.38 percent to close at 374.27 basis points.
At the close of trading, the market recorded 33 gainers, 26 losers, and 58 unchanged. THOMASWY topped the gainers list, while BUACEMENT topped the list of losers.
Flour Mills of Nigeria completes repayment of N51.64bn Series 2 Commercial Paper
Flour Mills of Nigeria Plc (FMN), a Nigerian food and agro-allied company, has repaid its N51.64 billion Series 2 Commercial Paper (CP) on November 17, 2023.
This repayment follows the earlier completion of the N13.33 billion Series 1 payment on August 22, 2023.
The successful repayment of these Commercial Paper Programs highlights FMN’s robust financial position and the trust it commands within the market, according to Anders Kristiansson, FMN’s Group Chief Finance Officer. He also noted the company’s commitment using the Debt Capital Market to fulfill its operational financial needs in a statement shared with Businessday.
“We are delighted to confirm the prompt and successful repayment of our Series 2 Commercial Paper. This accomplishment mirrors FMN’s dedication to sound financial management and the faith vested in our organization by the investing community. “We extend our appreciation to our stakeholders for their unwavering support and affirm our dedication to delivering sustainable value while upholding the highest standards of corporate governance,” Kristiansson said.
The Series 1 CP and Series 2 CP, totaling N64.97 billion, were initially issued on February 22, 2023, as part of FMN’s N200 billion Commercial Paper Programme introduced earlier that month.
The company also initiated its N200 billion Commercial Paper Programme on February 10, 2023, launching Series 1 and Series 2 on February 22. Series 1, raising N13.33 billion with a yield of 13.0 percent, and Series 2, raising N51.64 billion with a yield of 14.0 percent.
Following the successful issuance of Series 1 and 2, FMN made strategic strides by introducing its Series 3 Commercial Paper in June 2023. The subscriptions from banks and Pension Fund Administrators contributed to the success, with banks at 39.7 percent and Pension Fund Administrators at 40.8 percent.
The management of this transaction was led by FBNQuest Merchant Bank Limited as the Lead Arranger, supported by ChapelHill Denham Advisory Limited, FCMB Capital Limited, and United Capital PLC serving as Joint Arrangers.
Established in September 1960 and listed on the Nigerian Stock Exchange since 1978, Flour Mills of Nigeria (FMN) Plc, known for the Golden Penny Food brand, has emerged as a frontrunner in Nigeria’s food and agro-allied industry.
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