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Abuja Exchange Hopeful as SEC Unfolds New Rules  (Posted Dec 2000) Tell your friends about this page! Email it to them. 

The task of attracting quotable companies was made easier for the newly-launched Abuja Stock Exchange (ASE) at the weekend as the Securities and Exchange Commission (SEC) released fresh rules on dual listing and multiple trading in the nation’s capital market. Since it was launched over a month ago, effective trading operations are yet to take off on the ASE, an indication that few companies, if any, are quoted on it. With the new investment rules by SEC, the ASE can now list any of the 265 securities already quoted on the rival Lagos Stock Exchange if approached by the issuers. Stockbrokers are now also permitted to belong to both Exchanges if they so wish. The fresh rules represent two amendments and four additions to the 1990 Investments and Securities Act (ISA), the nation’s foremost investment law. Specifically, the four new laws are:

• Rule 109 which now allows companies and other issuers to list their securities on more than one Exchange, provided they meet the listing requirements of each:

• Rule 119(a) stipulating that "a Securities Exchange shall by its rules permit trading in securities not listed on it provided that such securities has been registered and listed on any other recognised Exchange". However, this rule allows an Exchange to impose its own conditions for granting such ‘permitted trading status’ to its counterpart(s).

Such conditions must be filed with SEC as part of Rules of the Exchange.

• Rule 136(8) requires exchanges to permit their dealing members to belong to and trade on any other recognised Exchange. No Exchange should prohibit or penalise any such members. Also, a memorandum of understanding (MOU) between Exchanges on this matter must be filed with SEC.

• Rule 122 (4) (iii) is to check arbitrage by requiring that "the highest closing price of any security on the exchange upon which it is primarily listed should be the opening price on all other Exchanges".

The two amendments were made on:

• Rule 131(3) which deals with delisting of securities. An Exchange now has 10 days to approve issuers’ application for delisting and must notify SEC within the same period.

• Rules 42(1) and (4) now permits stockbrokers to be dealing members of different exchanges at the same time.

The above tinkering with the 1990 ISA, it is believed, will afford the Bureau of Public Enterprises (BPE) to list some of the Federal Government-divested equities in quoted companies currently being privatised on the ASE.

Mallam Nasir el-Rufai, BPE’s director-general had earlier promised: "We want to work with both of the Exchanges. We will definitely not abandon the Lagos Exchange, they have been helpful in the Privatisation process. What we are planning is a dual listing for the two exchanges. We will allow them to market themselves to us. Both of them are already talking to us".

SEC had maintained that, originally the ISA did not prohibit dual listing as it provided for cross-border securities transactions including listing of those stocks already quoted on foreign stock exchange. "In making these rules, the commission recognises amongst others, that though listing of securities is a question of business decision for the issuer, it should be encouraged in the interest of market development", Alhaji Ilyasu Dhacko, SEC’s corporate affairs director said.

Culled from The Guardian Newspaper

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