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In a bid to bolster the Central Bank of Nigeria’s (CBN) recapitalisation programme and achieve its targeted objectives, the Securities and Exchange Commission (SEC) has unveiled its Framework on Banking Sector Capitalisation Programme for 2024. This framework, released on the SEC’s website on Friday, provides a comprehensive guide for banks, holding companies, and market participants to navigate the recapitalisation process effectively.
The initiative follows a recent directive from the CBN for banks to raise additional capital to support Nigeria’s $1 trillion economy goal. Under the new capital requirements, international banks are expected to increase their capital base to N500 billion, national banks to N200 billion, and regional banks to N50 billion.
The SEC’s framework aims to ensure that the capital-raising process is conducted efficiently, transparently, and in a manner that protects the interests of all stakeholders. It will guide banks, holding companies, and capital market operators in filing applications for capital raises and mergers or acquisitions.
Other objectives of the framework include ensuring full disclosure of material facts in compliance with the Investments and Securities Act 2007, as well as the SEC’s Rules and Regulations and other relevant laws. The framework is designed to ensure proper and timely review of transactions.
According to the SEC, “Following prevailing macroeconomic challenges and headwinds occasioned by external and domestic shocks, the Central Bank of Nigeria (CBN) has mandated a recapitalisation programme for banks to strengthen their asset base and support economic growth in line with the Federal Government’s target of achieving a $1 trillion economy by 2030. The capital market has a significant role to play in facilitating the recapitalisation programme as banks are expected to leverage the market to raise the needed funds and/or engage in various forms of business combinations.”
As the regulatory body responsible for the Nigerian capital market, the SEC is committed to ensuring a smooth, transparent, and efficient capital-raising process. The framework outlines the guidelines and procedures banks must follow to raise capital through rights issuance, private placements, or other approved methods during the 2024-2026 recapitalisation period.
Applications and documents are to be filed electronically via offerapplications@sec.gov.ng. The SEC will review the documents and communicate any observed deficiencies electronically. In the absence of any deficiencies, approval will be granted and communicated promptly.
The SEC also outlined penalties for incomplete applications: “Where an application is returned for being incomplete, a penalty of N1,000,000 and a re-filing fee of N100,000 shall apply. This fee is payable by the Issuing House without recourse to the Issuer or the Issue proceeds.”
For further inquiries or clarification, banks and stakeholders are encouraged to contact the SEC’s dedicated offer application email: offerapplications@sec.gov.ng.
The Commission emphasized that the framework is an excerpt of its existing Rules and Regulations and should be read in conjunction with the relevant provisions of the Investment and Securities Act, 2007, and the Commission’s Rules and Regulations.
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