By James Emejo in Abuja
Stakeholders have expressed support for the proposed demutualisation of the Nigerian Stock Exchange (NSE), describing it as a crucial step towards boosting liquidity and growth of the economy.
The National Assembly is currently promoting a bill to demutualise the NSE from a company limited by guarantee to a company limited by shares.
Demutualisation refers to the transition from a mutual association of exchange members to a limited liability company which is accountable to shareholders.Â
The concept typically separates ownership and voting rights from the right of access to trading on an exchange.
At a joint public hearing organised by the Senate and House of Representatives Committees on the Capital Market on a bill for anÂ Act to facilitate the development of Nigeriaâ€™s capital market by enabling the conversion and re-registration of the NSE from a company limited by guarantee to a public company limited by shares and for related matters, 2017, stakeholders agreed that the move was long overdue in order to stimulate liquidity in the system among other things.
Leading deliberations on the legislation, theÂ sponsor, Senator Foster Ogola, who is the acting Chairman, Senate Committee on Capital Market,Â said the NSE plays a critical role in the countryâ€™s financial market, arguing that the conversion and re-registration into a public company limited by shares is essential to developing and strengthening the market as well as enhancing the formation of capital for the expansion of the economy.
He said: â€œItÂ is anticipated that the demutualisation of the NSE will reinforce the continuous growth and development of a dynamic, fair, transparent and efficient capital market and thus significantly contribute to Nigeriaâ€™s economic development.â€
He said the planned demutualisation was in line with the 2015-2025 Capital Market Master Plan taunted to promote efficiency in the creation and harnessing of capital, as well as creating liquidity in the market, adopting and strengthening corporate governance best practices.
The Chief Executive Officer of NSE, Â Mr. Oscar Onyema, said the board had voted in favour of the demutualisation agenda during itsÂ extraordinary general meeting on March 30, 2017.
He said: â€œIt is of particular importance to the Nigerian capital markets and the wider economy that the exchange be aided to successfully demutualise, as it enables the exchange to serve the capital markets ecosystem and economy more effectively than it has done in the past.â€
According to him, the exercise will facilitate the development of the capital market, improve corporate governance and availability of resources from capital investments among other benefits.
Senate President, Dr. Bukola Saraki, represented by Senate Deputy Chief Whip, Senator Francis Alimikhena commended the exchange for its positive contributions to the growth of the economy, adding that it would open more opportunities for the economy.Â
House Speaker, Hon. Yakubu Dogara, represented by House Minority Leader, Hon. Leo Ogor, said the House was working on retooling the economy and would accept any initiative and ideas that would deepen the economy and create opportunities for growth.
However, Â Chairman, House Committee on Capital Markets and Institutions, Hon. Yusuf Tajudeen said the hearing was a â€œfurther demonstration of the commitment of the National Assembly through the Committees on Capital Market to re-position the NSE towards achieving its role not only as a critical institution but a major contributor to the economic development of Nigeria.â€