The Directorate oversees the under-listed Departments:
Securities Investment Services
The Department regulates securities offered to the public and all forms of business combinations. It monitors the activities of all publicly quoted companies and notes transactions involving private companies with foreign interest.
The Department consists of Three Divisions:
- Securities Offerings
- Mergers & Acquisitions
- SIS Legal
Securities Offering Division
The division is sub-divided into two units:
- Vets offer documents to ensure full disclosure of all material facts.
- Registers securities of public companies issued by way of public offers, rights issues, private placements, bonus issues and existing securities.
- Processes applications for conversion of preference shares or stocks to equity.
- Attends Completion Board Meetings to ensure proper conduct at the meeting.
- Makes input on rules regarding regulation of securities.
- Reviews proposed basis of allotment for public offers, rights issues and private placements to ensure compliance with regulatory requirements.
- Maintains registers of foreign portfolio and foreign direct investments.
- Computes penalties for late submission of proposed basis of allotment.
- Reviews post allotment compliance reports to ensure compliance with the Commission’s Rules and Regulations
- Recommends amendments to rules regarding allotment of shares.
- Reviews and vets offer documents
- Gives legal opinion on documents submitted by Issuers and/or Issuing Houses.
Mergers & Acquisitions
- Reviews and processes applications for acquisitions, takeovers, and management buy out.
- Maintains records of share-holders with interest of 5% and above in any quoted company
- Monitors and investigates market activities that are likely to give rise to mergers, acquisitions or takeovers.
- Investigates cases of business combinations which have not been cleared by the Commission
- Conducts post approval inspections to ensure compliance with the terms of approval
- Reviews fresh merger applications
- Promotes best practices in Mergers and Acquisitions in Nigeria.
- Makes inputs into rules relating to Mergers & Acquisitions
Registration & Exchanges
The Registration and Exchanges Department registers market operators and regulates the Stock, Commodity, Futures and Options Exchanges.
The Department is made up of Three (3) Divisions:
- Stock Exchange
- Commodity Exchange
- Processes applications for all prospective registrants (Self-Regulatory Organizations, Capital Market Operators, Capital Market Consultants)
- Gives legal opinions to market operators
- Reviews and vets all legal documents submitted by prospective registrants, and
- Review all amendments of functions/sponsored individuals, etc
- Collects SEC fees on purchase transactions on the Exchange.
- Reconciles monthly SEC fees receipts.
- Recovers underpayments and late payments
The Investments Management Department is responsible for developing and deepening the market in relation to Investment Management on one hand and protecting investors on the other. Read more on Investment Schemes
The Department comprises Four Divisions:
- Investment Schemes
- Private Equity & Venture Capital
- Fund Management
- Investment Mgt. (Legal)
- Review of applications for Registration and Authorisation of Unit Trust Schemes, Real Estate Investment schemes and other specialized schemes, to be offered to the public.
- Review of applications for Registration and Authorisation of Private Equity, Infrastructure and Venture Capital Funds.
- Review of monthly, Quarterly and Half yearly returns of CIS Accounts.
- Review of Annual Accounts of Collective Investment Schemes.
- Monitoring, Inspection and general surveillance of all registered Schemes.
- Propose new rules and amendment of existing rules.
- Preparation of weekly, monthly, quarterly and annual reports.
- Preparation of position papers on issues relating to CIS.
Investment Schemes Division;
- Review of Application for the Registration of Unit Trust Schemes, Real Estate Investment Trust Schemes, and Exchange Traded Funds and other Specialised Mutual Funds.
- Continuous monitoring of Schemes and Assessment of Funds’ Performance through supervision and review of Half Yearly Returns.
- Review and Clearance of Annual Audited Accounts.
- Inspection and General Surveillance of Schemes.
Under the Investment Schemes Division, there are fifty-five (55) registered/authorised Collective Investment Schemes (CIS) in operation in Nigeria as at April 2015 under the following investment categories:
A. Unit Trust Schemes
- 18 Equity Funds
- 10 Bond Funds (Fixed Income)
- 10 Mixed/Balanced Funds
- 5 Money Market Funds
- 5 Ethical Funds
- 1 Umbrella Fund (with 3 sub-funds)
B. Exchange Traded Funds (ETF) – 3
C. Real Estate Investment Trust (REIT) – 3
Private Equity & Venture Capital Division;
- Review of applications for Private Equity, Venture Capital and Infrastructure Funds.
- Conduct analysis of quarterly returns of all fifty-five (55) CIS funds
- Preparation of weekly and monthly Net Asset Value (NAV) of all fifty-five (55) CIS funds for upload to the Commission’s website
- Preparation of monthly and quarterly investment schedule of all fifty-five (55) CIS funds for upload to the Commission’s website
- Preparation of quarterly expense ratio of all fifty-five (55) CIS funds for upload to the Commission’s website
- Analysis of Custodian returns of all fifty-five (55) CIS funds
- Preparation of weekly and monthly reports
Under the PE&VC Division, there are six (6) registered/authorised Collective Investment Schemes (CIS) in operation as at April 2015 under the following investment categories:
A. Private Equity Funds – 4
B. Infrastructure Funds – 2
See registered Venture Fund Managers
Fund Management Division;
- Review of firms’ business structure and products to identify areas of significant business operations and inherent risks as regards Funds/Portfolio Management functions.
- Undertake monitoring on a continuous basis of item 1 above and any changes on firms business structure, products and strategy as regards fund/portfolio management operations.
- Undertake risk assessment of fund management firms operations through population of a risk matrix to ascertain the composite risk rating and direction of risk for each firm.
- Quantitative and qualitative risk based assessment of firms and their operations through review and analysis of statutory returns from Fund/portfolio managers.
- Macro prudential analysis (external) of the performance of overall financial market (money and capital markets) and their influence/impact on the operations of Fund/Portfolio Managers.
- Undertake as necessary, on-site and target examination on:
- Systemically important firms, and
- Firms with high net risk position
- Collate, organize and produce reports on overall Fund/Portfolio Management operations, performance by firms, trend in asset allocation and proportion distribution of aggregate Fund under Management to GDP.
- Continuous research and review of existing rules and regulations to bring it up to date with global best practices, IOSCO guidelines and to cater for developments and innovations in Funds/Portfolio Management operation in the Nigerian Capital Market.
Legal Division (Investment Management)
The Department is responsible for rendering accounting and auditing advisory services, the detailed analysis of audited financial statements and periodic reports of public companies and monitoring and ensuring compliance with the Code of Corporate Governance 2011.
The Department is made up of two Divisions:
- Financial Analysis
- Disclosure and Compliance
- Advises the Commission on Accounting and Auditing matters arising from the Implementation of the Investment and Securities Act.
- Analyses Financial Statements of Public companies with a view to assessing their financial health and compliance with SEC Disclosure requirements and applicable accounting standards (SAS, GAAP & IFRS).
- Monitor compliance by public companies of the Code of Corporate Governance to promote best practice.
- Liase with accounting and auditing standards setting bodies, regarding the promulgation of new or review of accounting and auditing standards (eg Nigerian Accounting Standards Board).
- Liase with the Nigerian Accounting Standards Board (NASB), Institute of Chartered Accountants (ICAN), World Bank and other relevant bodies in monitoring the activities of external auditors of quoted companies.
- Provide Financial Services to other departments within the Commission eg SIS, CIS, RRIE etc.
- Represents the Commission on the Board of Institute of Directors (IOD), the Committee of Nigerian Accounting Standards Board (NASB) and on the Committee of FRSCC and FSS 2020.
The Market Development (MD) Department derives its functions from section 13 (e) (f) (i) (j) (k) (s) (t) (z) of the ISA No. 29 of 2007. Its main functions include among others;
- To support drafting and review of policies on capital market development
- To optimize product types and structures for optimal financial literacy and public confidence
- To encourage a healthy balance of creativity and compliance in product development within the capital market
- To ensure all stakeholders – investors, academic community, market operators, law makers, professional bodies, government functionaries – are appropriately educated on the activities and initiatives of the Commission
- To effectively identify and support management of strategic domestic, regional and international stakeholder groups
- To oversee the development and implementation of investor education materials and programmes
- To oversee the development of interest in capital market studies amongst students of different ages by organizing targeted Quizzes and other Competitions amongst schools (Primary, secondary and Tertiary)
- To work in conjunction with the Nigerian Capital Market Institute to develop high quality programmes for stakeholders’ education
- To stimulate development of new products that meet the standards of the International Organization of Securities Commissions (IOSCO)
- To work with market operators in ensuring the implementation of the recommendations of the Committee on the Review of Capital Market Structure and Processes
- To collaborate with in-house Research and external studies to identify needs, trends and opportunities within the sector and promote innovation around such gaps
To achieve the above objectives the Department is currently made up of Three (3) Divisions namely;
- Investor Education
- New Products
- Market Infrastructure