Owner-members of the Nigerian Stock Exchange (NSE) has approved the demutualisation programme of the Exchange under which the Exchange will convert from its present status of non-profit, mutually owned status to a profit-making public limited liability company with shareholders.
At the Extra-Ordinary General Meeting (EGM) at the Stock Exchange House in Lagos, members of the Exchange passed three resolutions authorizing the council and management of the Exchange to proceed with the process leading up to the demutualisation of the Exchange.
Members also ratified and approved the engagement of financial advisers, legal advisers, tax advisers and any other adviser that may be required for the demutualisation while the meeting equally mandated the council and management of the Exchange to do all such things and exercise all such powers as may be necessary or incidental to achieving the demutualisation subject to applicable laws and regulations and obtaining the approvals of members and the relevant regulatory authorities.
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President, Nigerian Stock Exchange (NSE), Mr. Aigboje Aig-Imoukhuede said the approval of the NSE demutualisation plan marks the achievement of an important milestone towards completion of the exercise.
“The demutualization of the Exchange will bring the Nigerian capital market on a par with other international jurisdictions, result in enhanced governance, transparency and visibility whilst attracting strategic partners, investors and good quality issuers. These are historic times indeed,” Aig-Imoukhuede said.
Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, said the approval of the demutualisation process will generate substantial motivation for the development of an agile Exchange thereby consolidating its innovativeness and strengthening its leadership both at local and international levels whilst also adding value to its stakeholders.
According to him, as a demutualized entity that is profit-seeking, the NSE will be in a better stead to capitalize on new income opportunities, free from any limitations arising from conflicting member interests and existing laws and more importantly be able to better support the economic growth of Nigeria.
Demutualisation is the process through which any member owned organisation becomes a shareholder-owned company.
Basically, it refers to the conversion of a non-profit, mutually owned company to a for-profit entity limited by shares. Demutualisation segregates ownership and management from the trading rights of the members of an exchange.
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