SEC to Commence Regulatory Fee on Fixed Income Transactions January 1

Ndubuisi Francis in Abuja

The Securities and Exchange Commission (SEC) is to commence charging regulatory fee on fixed income secondary market transactions (bonds) with effect from January 1, 2022.

This was contained in a circular dated December 15, 2021, signed by the Management of the SEC.
The Commission stated: “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.

SEC added 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.

The circular also stated that by this fee structure, the SEC would charge 0.025 per cent of the total value of all secondary market transactions on 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.

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.