NEW RULES/AMENDMENTS TO THE RULES AND REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION

Pursuant to Section 313(6) of the Investments and Securities Act 2007, the
following new rules and amendments to the existing rules are made by the
Commission.
G. RULES ON PRIVATE EQUITY FUNDS – Rule 249D
DEFINITION OF TERMS
In these Rules, except otherwise stated, the following terms are defined as
follows:-
Private Equity Fund: a type of collective investment scheme that
invests primarily in private equity/unlisted
companies, whether or not in an attempt to
gain control of the company.
Qualified Investors: shall have the same meaning as defined in
these Rules.
1. INTRODUCTION
A Private Equity Fund shall be subject to authorization and registration by the
Commission.
2. APPLICABILITY
These Rules shall apply to all Private Equity Funds with a minimum commitment
of N1billion investors’ funds.
3. ELIGIBILITY
The fund manager of a Private Equity Fund shall have a minimum paid-up capital
of N20 million.
4. RESTRICTIONS
A Private Equity Fund shall not:
i. solicit funds from the general public, but shall privately source funds from
qualified investors alone;
ii. invest more than 30% of the Funds assets in a single investment.
5. GENERAL
An application for authorization and registration of a Private Equity Fund shall be
filed along with the Information Memorandum to be issued to the target
investors. The Information Memorandum shall amongst others contain the
following information:
a. the investment policy and objective of the Fund;
b. the industry or geographical focus of the Fund;
c. the fund managers experience in private equity;
d. the investment criteria for target portfolio companies;
e. the names and profile of the fund managers principal officers and
management team;
f. tax issues;
g. Material risks of investing in the Fund;
h. a statement of any minimum investment commitment required of an
investor;
i. total capital commitment;
j. net target investment return;
k. distribution of proceeds and sharing ratio;
l. relevant fees and charges connected with investment in the Fund;
m. provision for admission of new and withdrawal of existing investors;
n. valuation methodology and frequency of valuation;
o. exit routes from investments;
p. management participation in the Fund;
q. repayment of capital;
r. duration of the Fund and extension;
s. prototype Agreement between the fund manager and investors;
t. the establishment of an anti-money laundering program and duty to
report suspicious activity;
u. the duties, responsibilities and liabilities of the fund manager;
v. provision for meetings and voting quorum.
w. economic development impact
6. REPORTING
I. A Private Equity Fund manager shall submit to the Commission:
i. quarterly returns of the Fund which shall state amongst others:
a. The total number of investors in the Fund;
b. The total commitment received from investors;
c. The total commitment already drawn-down;
d. The current investments of the Fund;
e. The current value of the assets of the Fund;
ii. Annual account/report of the Fund.
II. A Private Equity Fund manager shall issue semi-annual reports to the
investors which shall content relevant information including the following:
a. Details of total commitments;
b. Draw-down and distributions;
c. Changes to investment strategy (if any);
d. Current and new investments;
e. Detailed realization summary by investments;
f. Valuation of each investments;
g. Statement of benefits, fees and net management fee.
7. VALUATION
A Private Equity Fund investments’ shall be valued at Fair Value where fair value
is the amount for which an asset could be exchanged between knowledgeable
willing parties in an arm’s length transaction.
In the absence of an active market for the financial instrument, the valuer shall
estimate fair value utilizing a disclosed valuation methodology.

MADE AT ABUJA THIS 28th DAY OF FEBUARY 2013