SEC introduces guidelines for banks to raise capital efficiently
By Opeyemi Abdulsalam
The Securities and Exchange Commission (SEC) has introduced a comprehensive framework to support the Central Bank of Nigeria’s (CBN) bank recapitalisation program.
This framework aims to ensure a seamless, transparent, and efficient process for banks and holding companies to raise capital.
The framework serves as a guide for banks and market participants, outlining the necessary procedures and guidelines for raising capital through various methods, including rights offerings and private placements, between 2024 and 2026.
The SEC recognises the importance of strengthening banks’ asset base and supporting economic growth, as highlighted by the CBN’s directive.
The framework acknowledges the crucial role of the capital market in facilitating this program, enabling banks to access necessary funds and explore business combinations.
According to the SEC, this framework will ensure an efficient, transparent, and stakeholder-friendly capital raising process.
The SEC has established a streamlined application process, requiring electronic submission of applications and supporting documents via a dedicated email address.
The commission will review applications, communicate any deficiencies to applicants, and expect prompt resolution to avoid delays. Incomplete applications will incur penalties, including a N1,000,000 fine and N100,000 re-filing fee, encouraging banks to submit complete and accurate information.
The SEC encourages inquiries and clarifications via a dedicated email address, ensuring open communication and efficient navigation of the process.
Building on existing regulations, this framework should be read in conjunction with relevant provisions of the Investment and Securities Act, 2007, and the Commission’s Rules and Regulations.
In response to the CBN’s directive, the SEC framework provides a clear guide for banks and market participants, aiming to strengthen Nigeria’s banking sector and support economic growth.
