NGX Gets SEC Approval to Charge 0.0375% on Fixed Income Primary Issuance

Kayode Tokede 

The Nigerian Exchange Limited (NGX) has received approval from the Securities and Exchange Commission (SEC) to commence 0.0375 per cent fees on corporate bonds of issuers with an existing equity on the bourse.

The latest notification titled: “The revised fees on fixed income primary issuance on the Exchange-non exclusive (Dual) listing” commenced March 10, 2022,” was signed by the Chief Executive Officer, NGX regulation Limited, Tinuade Awe. 

According to her, “Further to the Additions to the Rules of the SEC on fixed income primary issuance fees which stipulated a new pricing structure effective November, 22,2017, notice is hereby given that, NGX has received the approval of the Commission to introduce fees for non-exclusive fixed income listings on The Exchange, which have become effective.”

She added that in light of the foregoing, as from the March 10, 2022, the relevant fees for fixed income primary issuance on the Exchange are: “ 0.0375 per cent of offer size fees on corporate bonds of issuers without listed equity and 0per cent of offer size fees on exclusive listing on corporate bonds of issuers with existing listed equity listed on the Exchange.”

Other fees unchanged by SEC is 0.05 per cent of offer size on states and Supra-nationals.

Capital market stakeholders had expressed mixed feelings following the proposed plan by SEC to introduce charge on fixed income (Bonds) secondary market transactions.

The Managing Director/CEO of Trust Yields Securities Limited noted that the new fee would hike in the cost of transactions in the fixed income instruments.

In his words: “Both the buyer and seller of fixed income instrument will have to pay the additional cost. Will it make prospective investors mull on the additional cost and conclude that the yield on longer attractive? These are the things we will be looking out for next year.”

Also, the Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Mr Sam Onukwue said: “I do not think it’s out of place for SEC to do so.The Commission has been charging on equities all along. The proposed charges on fixed income securities should not discourage investors from the asset class.Investors have their preferences and would always weigh their risk tolerance and other fundamentals in making investment decisions.”