SEC Threatens N1m Penalty for Incomplete Capital Raise Applications by Banks


The Securities and Exchange Commission (SEC) has announced it will impose a N1 million penalty on banks that fail to submit complete capital raise applications, in line with banking sector recapitalisation guidelines.

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According to a statement provided to The PUNCH on Friday, banks must follow specific norms and procedures to raise capital through rights issuance, private placements, or other authorized means. The SEC emphasized that applications and supporting documents must be submitted online via email. These documents will be reviewed, and any deficiencies will be communicated to applicants electronically.

“Where an application is returned for being incomplete – a penalty of N1,000,000 and re-filing fee of N100,000 shall apply. This fee is payable by the Issuing House without a recourse to the Issuer or the Issue proceeds,” the statement read in part.

The SEC highlighted that this initiative supports the Central Bank of Nigeria’s directive for banks to raise additional capital, which is crucial for overcoming economic challenges and achieving a $1 trillion economy by 2030.

“As the regulatory institution mandated to regulate and develop the Nigerian capital market, the Securities and Exchange Commission has the responsibility to ensure a smooth, transparent, and efficient capital raising process by the banks. This framework outlines the guidelines and procedures banks are required to follow to raise capital through rights issuance, private placements, or other approved methods during the 2024–2026 recapitalization period,” the statement continued.

The SEC specified that international banks must increase their capital base to N500 billion, national banks to N200 billion, and regional banks to N5 billion, in compliance with the new CBN capital requirement.

“The commission said the framework would help to ensure that the capital raising process is conducted efficiently, transparently, and in a manner that protects the interests of all stakeholders,” it added.

The SEC advised banks and stakeholders to meticulously adhere to these guidelines, noting the framework’s alignment with existing regulatory provisions under the Investment and Securities Act of 2007. It also emphasized the importance of updating corporate information with the Corporate Affairs Commission before filing applications to streamline the approval process and enhance regulatory oversight.

“The commission may require other documents or information as may be necessary. Where an issuer had already filed necessary documents with the SEC (e.g., a Memorandum and Articles of Association (Memart) or a certificate of incorporation or a certificate of increase in share capital, etc.),” the regulator explained.

On March 28, the CBN announced new minimum capital requirements for banks, setting the minimum capital base for commercial banks with international authorization at N500 billion.

Emman Tochi
Emman Tochi
Emma Tochi is Naija247news Media Northern Bureau Chief, he's based in FCT Abuja. He overseas the northern operations of this business media

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