SEC says Rule on Oversubscription of Banks’ Share Offers Not Cast in Stone

The Securities and Exchange Commission, SEC has said that the 15 per cent rule for absorption of over-subscription of share offers will not be rigidly applied to the share offers of banks under the banking recapitalisation exercise.

Dr. Emomotimi Agama, Director General of the Commission stated this at his first post Capital Market Committee, CMC press briefing held in Lagos, adding that the Commission will determine the overall absorption level of each company on a case by case basis.

Agama said: “The rule says if an offer is oversubscribed, fifteen percent of the oversubscribed portion is allowed to be absorbed by the company. However, as a Commission, we are very amenable to opportunities that exist and so it is not cast in stone.

“If we discover that the over-subscription is beyond 15 percent and there is good reason for the absorption, we take each company case by case. So that people know exactly what they are doing.

“The laws are there and we must obey the laws. So we have a discussion and make sure that opportunities are provided especially when it is regulatory induced, we must ensure that every policy of government succeeds.

“We are partners with every institution of government to making sure that their policies succeed as they are partners with us to making sure that our policies succeed. But fundamentally, the rules say you take 15 percent of over subscription.”

Commenting on the effort the Commission is making to attract listing on the stock market, Agama said: “We will continue to encourage companies to list and urged the Exchanges to take steps to attract new listings to align with the government’s $1 trillion economy target. The Commission is ready to continue promoting capacity building on derivatives both for market operators and regulators.

He also expressed optimism about unlocking the full potential of the capital market, in aligning with the Renewed Hope Agenda of the President Bola Ahmed Tinubu led administration.