- SEC directs capital market operators to implement ERM framework
Fidelity Bank Plc will launch its N127.1bn capital raise via a public offer and rights issue on June 20, 2024.
The lender stated that it had signed the necessary documentation to raise about N127.1bn from a public offer and rights issue to its existing shareholders to raise its capital base in line with the Central Bank of Nigeria’s fresh capitalisation directive.
The bank is eyeing N97.5bn in fresh funds from its public offer and N29.6bn from its rights issue, which offers existing shareholders one new ordinary share for every 10 ordinary shares held as of January 5, 2024, at N9.25 per share.
On March 28, the Central Bank of Nigeria mandated commercial lenders in the country to shore up their capital base within the next 24 months, to prepare them for a $1tn economy, which the government is targeting.
Fidelity Bank stated that the rights issue will involve N3.2bn ordinary shares of 50 kobo each, offered at N9.25 per share.
According to the bank, existing shareholders will have the opportunity to acquire one new ordinary share for every 10 ordinary shares held as of January 5, 2024.
It added that the public offer would make N10bn ordinary shares of 50 kobo each available to the general investing public at N9.75 per share.
It was declared that the acceptance and application period for both the rights issue and the public offer will close on July 29, 2024.
According to Fidelity Bank, Stanbic IBTC Capital is leading the issuance, supported by a consortium of joint issuing houses, including Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, FSL Securities Limited, Futureview Financial Services Limited, and Iroko Capital Market.
Meanwhile, the bank will be holding a ‘Facts Behind the Offer’ presentation at the Nigerian Exchange on June 20, to provide comprehensive details and engage with potential investors.
“This presentation is a crucial part of Fidelity Bank’s strategy to communicate the benefits and potential returns of this capital-raising effort to stakeholders,” it noted.
SEC directs capital market operators to implement ERM framework
Meanwhile, the Securities and Exchange Commission has mandated all capital market operators to implement an Enterprise Risk Management framework that aligns with internationally recognised standards.
This was disclosed in a statement issued on the Securities and Exchange Commission website.
According to the SEC, these standards include those set by the Committee of Sponsoring Organisations of the Treadway Commission, the International Organisation for Standardisation and the Financial Action Task Force Recommendations.
It added that this initiative aimed to bolster risk management practices within the capital market, minimize systemic impacts, and safeguard stakeholders’ interests.
“All capital market operators are hereby directed to implement an enterprise risk management framework that conforms to international standards such as the Committee of Sponsoring Organisations of the Treadway Commission, the International Organisation for Standardisation (ISO 31000), Financial Action Task Force Recommendations and any other internationally recognised risk management standards.
“Adoption of comprehensive risk management practices is imperative for minimising systemic impact and safeguarding the interests of all stakeholders,” it explained.
According to the commission, the new ERM framework requires CMOs to consider their operational structure, business activities, client demographics, products, services, and delivery mechanisms.
It noted that the framework must include a comprehensive risk governance structure with clear roles and responsibilities, including the establishment of a risk management committee.
To ensure accountability and oversight, the SEC directed CMOs to define their risk appetite, tolerance statements, and consistent reporting to senior management and the board of directors.
It added that organisations must implement risk-awareness programmes to cultivate a culture of risk management throughout their operations.
“This directive is aimed at strengthening the implementation of risk-based supervision, including anti-money laundering and counter-terrorism financing measures in the capital market.
“Consequently, all CMOs are required to submit a Board-approved risk management policy (selectable and searchable PDF format) on or before September 30, 2024, via email at rbs@sec.gov.ng to obtain a ‘No Objection,” it stated.
The commission noted that the directive was part of its broader strategy to enhance risk-based supervision in the capital market, including measures for anti-money laundering, countering the financing of terrorism, and countering proliferation financing.
It also asked CMOs to submit an annual risk profile by January 31 of each year.
“Every CMO is required to submit their annual risk profile no later than January 31. In addition, emerging threats and measures put in place to mitigate them must be assessed and reported to the Commission for review,” it declared.