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SEC to impose charges on bonds transaction in a move to raise revenue profile

The Nigeria’s Securities and Exchange Commission (SEC) said that it would charge 0.025 percent on all secondary market transactions in the country from January 2022.

In a circular dated December 15, 2021, SEC stated that it would charge the transaction fee on total value of bonds while the securities exchange on which the transaction occurs would charge an amount not exceeding 0.025 per cent of the total value of secondary market transactions on bonds in accordance with the Investments and Securities Act (ISA), 2007 and Schedule 1, Part D of the SEC Rules (Registration Fees, Minimum Capital Requirements, Securities and others) which empower it to impose levy capital market transactions.

“This circular is made pursuant to Section 13(u) of the Investments and Securities Act (ISA), 2007 and Schedule 1, Part D of the SEC Rules (Registration Fees, Minimum Capital Requirements, Securities and others) which empower the Securities and Exchange Commission (SEC) to levy, among others, fees on transactions relating to investments and securities business in Nigeria.”

It added that capital market operators (CMOs) and stakeholders were generally being notified that a regulatory fee structure on secondary market transactions on bonds would take effect from January 1, 2022.

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SEC said that secondary market transactions on bonds shall include bond transactions executed on a Securities Exchange (Exchange), reported by voice or by any other means to an Exchange as having being transacted thereon or of which the information of the transaction details are featured on the Exchange’s platform for purposes including but not limited to onward transmission to a Depository for settlement, price discovery and corporate disclosure.

However, bond transactions by Dealing Members would attract a single regulatory fee of 0.0001 per cent of the total value of the secondary market transactions on bonds, and are exempt from the 0.025 per cent fee charge earlier stated.

The Commission stated that the circular supersedes previous directives given by the Commission on the subject.

SEC also informed all CMOs and the general public that the annual renewal of Registration of CMOs for the year 2022 will commence from 1st January, 2022.

SEC has been facing financial challenges in recent time and considering sacking some of its workforce to cut costs as revenue dwindled.

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