LEGAL AND INSTITUTIONAL FRAMEWORK REGULATING PUBLIC OFFERING OF SECURITIES IN THE NIGERIAN CAPITAL MARKET

LEGAL AND INSTITUTIONAL FRAMEWORK REGULATING PUBLIC OFFERING OF SECURITIES IN THE NIGERIAN CAPITAL MARKET

BACKGROUND TO THE STUDY

Public offering of securities is no doubt a contemporary commercial

issue. Most developed economies all over the world are private sector

driven. Thus, a strong and virile private sector become the engine of

growth and the fulcrum upon which the economic and industrial

development of a nation is sustained. The private sector, i.e. companies

and enterprises, raise capital from private sources for productive

activities. The most viable of which is the capital market, by going public

with the securities of their companies through the process of public

offering.

However, most economies of developing nations are comatose because of

the weak private sector foundation. The Economies are government

driven and the private sector participants depend on government for

funding. Given the competing demands for government resources, like

the provision of infrastructure, servicing of external debts etc, they are

hardly enough resources at the disposal of government to pump into the

private sector and jump – start the economic growth and development of

these countries. Most public companies and enterprises perform bellow

optimum level, because of the lack of funds. As William Cowper (1872)

state; A business with an income at its heels furnishes always, oil for its

own wheels”.1

The Investment and Securities Act (ISA) 1999 provided in part viii, for

the provisions governing public offering and sale of securities. It also

extensively outlined forms of invitation to the public for subscriptions of

shares. It must, however, be noted that the provisions of the ISA as shown

in part viii are only applicable to equities (shares) of Public Limited

Liabilities Companies (PLCs), whether quoted or unquoted. The law,

therefore, specifically excludes the offering of equities of Private Limited

Liability Companies to the public. Pursuant to the powers conferred on

it,2 the Securities and Exchange Commission (SEC) drew up rules and

regulations governing application of matters generally provided for in

part viii of the ISA. It also formulated a Code of Conduct for Capital

Market Operators and their Employees (CCCMOE), for ease of its

regulation of the market.

TOPIC: LEGAL AND INSTITUTIONAL FRAMEWORK REGULATING PUBLIC OFFERING OF SECURITIES IN THE NIGERIAN CAPITAL MARKET

Chapters: 1 - 5
Delivery: Email

Number of Pages: 75

Price: 3000 NGN

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