NSE Hits 5 Firms with Sanctions for Market Infractions

Nigerian Stock Exchange (NSE) has sanctioned Standard Alliance Insurance Plc, Prestige Assurance Plc, Goldlink Insurance Plc, African Alliance Insurance Plc and International Energy Insurance Plc (IEI) for various contraventions.

Data obtained from the X-Compliance Report published on the NSE website, stated that the firms were sanctioned for contraventions ranging from default in filing 2018 audited financial reports; failure to file first quarter 2019 reports and unauthorised publication of annual general meeting notice.

The exchange stated that Standard Alliance, Goldlink and International Energy Insurance Plc were found to have breached the rules over non-rendition of 2018 and 2019 financial statements, as well as non-rendition of quarterly financial statements.

Prestige Insurance breached the rule in unauthorised publications, non-disclosure of material information, among others.

African Alliance Insurance Plc breached the rules for non-rendition of its 2019 audited financial statements and non-rendition of quarterly financial statements.

The NSE said the X-Compliance Report is a transparency initiative which  designed to maintain market integrity and protect investors by providing compliance related information on all listed companies.

It maintained that companies that are listed on the exchange are required to adhere to high disclosure standards which are prescribed in the Rulebook of the exchange, 2015 (Issuers’ Rules), and other Rules of the exchange, from time to time, stressing that financial information, which is periodic disclosure, as well as on-going material information disclosure should be released to the exchange in a timely manner to enable it efficiently perform its function of maintaining an orderly market. The X-Compliance Report is updated every Friday at the close of market, it said.

The exchange identified Goldlink, Standard Alliance, IEI, and African Alliance as companies that fell short of the minimum listing standards in terms of timely disclosure of their audited annual financial statements and have Missed Regulatory Fillings (MRF) or are Awaiting Regulatory Approval (AWR) from their primary regulators.

It said the sanctions for non-compliance with periodic financial disclosure obligations are clearly spelt out in its Rules for Filing of Accounts and Treatment of Default Filing, Rulebook of The Exchange (Issuers’ Rules).

On the non-rendition of quarterly financial statements for Q1 2020, it said companies listed on the exchange are required to file their quarterly accounts within 30 days after the end of the quarter in accordance with the Rules for Filing of Accounts and Treatment of Default Filing, Rulebook of The Exchange (Issuers’ Rules).

The exchange said: “Under Schedule 3: Delinquent filers of audited financial statements, the Exchange has identified the companies listed on Schedule 3 as companies that fell short of the minimum listing standards in terms of timely disclosure of their audited annual financial statements and have Missed Regulatory Fillings (MRF) or are Awaiting Regulatory Approval (AWR) from their primary regulators.”

“Every listed company is required to provide the exchange with timely information to enable it efficiently perform its function of maintaining an orderly market. In accordance with the provisions of Appendix III: General Undertaking (Equities), Rulebook of The Exchange, 2015 (Issuers’ Rules) and The Exchange’s Circular No. NSE/LARD/LRD/CIR3/17/05/12 on publication of announcements or press releases via the issuers’ portal, listed companies are required to obtain prior written approval from The exchange before publications that affect shareholders’ interest are made in the media or via the issuers’ portal.

“In addition, companies are also required to disclose material information to The Exchange and publish the information in their annual reports. The companies listed under Schedule 5 breached certain provisions of the listings rules and were sanctioned accordingly.

“Under Schedule 9, regulatory suspensions are suspended pursuant to the provisions of Rule 3.1, Rules for Filing of Accounts and Treatment of Default Filing, Rulebook of The Exchange (Issuers’ Rules), which provides: “If an Issuer fails to file the relevant accounts by the expiration of the Cure Period, The Exchange will send to the Issuer a “Second Filing Deficiency Notification” within two (2) business days after the end of the Cure Period; suspend trading in the Issuer’s securities; and notify the Securities and Exchange Commission (SEC) and the Market 24 hours of the suspension.”