CIS backs SEC on fixed income securities charges

The Chartered Institute of Brokers (CIS) is backing the Securities and Exchange Commission (SEC) to introduce charges on fixed income securities in Nigeria’s capital market.

The CIS president, Mr Olatunde Amolegbe, said this in an interview with the News Agency of Nigeria (NAN) on Wednesday in Lagos.

Amolegbe said there was no issue with the introduction of a regulatory charge on transactions.

“The Securities and Exchange Commission is bringing significant regulations to all markets including the fixed income markets.

“This is to bring more sanity to those markets. Therefore, there is no issue with the introduction of a regulatory charge on transactions.

“However, whether it should be as high as 0.02 per cent is open to discussion,” he said.

The CIS boss explained that there was the possibility that the introduction of the regulatory charge would increase the net yield on instruments, reduce spreads and impact trade volumes.

“I am sure the market ecosystem will ultimately arrive at a point of equilibrium for all participants,” Amolegbe said.

NAN reports that SEC said it would commence regulatory fee on fixed income (bonds) secondary market transactions with effect from Jan. 1.

SEC said this in a circular in December 2021.

The commission said the circular was 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).

The circular empowers SEC to levy, among others, fees on transactions relating to investments and securities business in Nigeria.

The circular stated that capital market operators and stakeholders generally were notified that a regulatory fee structure on secondary market transactions on bonds would take effect from Jan.1.

It noted that secondary market transactions on bonds would include bond transactions executed on a securities exchange, reported by voice or by any other means to an Exchange.

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

The circular said the securities exchange on which the transaction occurred would charge an amount not exceeding 0.025 per cent of the total value of secondary market transactions on bonds.

It added that 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