Issuers are the legal entities that develop, register and sell securities for the purpose of financing their operations. Issuers may be domestic or foreign governments, corporations or investment trusts. They are legally responsible for the obligations of their issues, and for reporting financial conditions, material developments and any other operational activities as required by the regulations of their jurisdictions. The most common types of securities issued are common and preferred stocks, bonds, notes, debentures, bills and derivatives.
Private companies looking to list on the exchange must comply with the listing rules and requirements of the Exchange that would enable them list their tradable securities on one-of-two boards in the Equities Market:
In the same vein, listed companies looking to borrow additional capital from the public may offer debt products. They must also meet specific requirements and follow certain rules set by the Exchange. These corporate debt products are listed on one-of two boards in the Debt Market:
- Corporate Bonds
- Preference Shares
Finally, fund managers may also list their investment funds on the exchange. These products are not actively traded on the exchange, but they are listed to provide the investing public access to their daily prices. Investment funds are a form of collective fund that pools money from many investors and typically invests in investment securities; they are listed on the List of Memorandum Quotations Market.
TYPES OF
BUSINESS ENTITIES ELIGIBLE TO LIST THEIR SECURITIES ON OUR EXCHANGE
- Large Nigerian companies: The Main Board comprises large companies with at least 300 shareholders, 20% of share capital on offer to the public, and the ability to raise an unlimited amount of capital. Other requirements must also be met as are outlined in the NSE’s listing requirements (i.e. the Green Book).
- Small-to-medium Nigerian enterprises (SMEs): The ASeM comprises SMEs with at least 51 shareholders, 15% of share capital on offer to the public, and the ability to raise an unlimited amount of capital. Other requirements must also be met as are outlined in the NSE’s listing requirements (i.e. the Green Book).
- Foreign companies (Overseas issuers): Foreign companies looking to raise capital from the Nigerian market may list on the exchange. There are several requirements they must meet in their home countries first, including being listed on their own stock exchange, before they can qualify to list in Nigeria. There must also be a signed Memorandum of Understanding (MOU) between the NSE and the company’s home country exchange to ensure all available means of natural process for investor protection. Other requirements must also be met as are outlined in the NSE’s listing requirements (i.e. the Green Book).
- Investment Trusts (Unit): A separate legal person or company constituted under a trust deed that has a fund manager (runs the trust for profit), trustees (ensure the fund manager keeps to the fund's investment objective and safeguard the trust assets), unit holders (have the rights to the trust assets), distributors (allow the unit holders to transact in the fund manager's unit trusts), and registrars (usually engaged by the fund manager and generally act as middlemen between the fund manager and various other stakeholders).
- Investment Trusts (Real Estate): Globally, a tax designation for a corporate entity investing in real estate that is intended to reduce or eliminate corporate income taxes. REITs are typically required to distribute 90% of their income into the hands of the investors. The REIT structure was designed to provide a similar structure for investment in real estate as mutual funds provide for investment in stocks. Like other companies, REITs can be publicly or privately held.