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Creating liquidity …Transparently
Lagos,
11 April 2023
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LBS BUSINESS BREAKFAST- OPPORTUNITIES ON NASD OTC
Creating liquidity …Transparently11/04/23
CONTENTS
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ABOUT US
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• From an Association of securities dealers
• To a SEC licensed OTC market in December 2012
• A PLC owned by market operators
• A self regulatory organisation
• Focussed on building transparency and liquidity‒ Start point is equities
• Vision ‒ To be the hub of first call for capital formation in West Africa
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HISTORY AND FOCUS
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Banks
Clearing
Platforms
Participants > 77 Dealing firms> 23 Issuing Houses> 119 Authorised Traders
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ECO-SYSTEM
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Stakeholder Value Added
Issuers Create public visibility
Investors Open market pricing
Market Transparency and liquidity
Private Equity An efficient exit window
Overall Economy Growth
SUMMARY OF VALUE ADD
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EXAMPLES OF VALUE ADD
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• Investor confidence:‒ Provides transparency in trading of unlisted securities
‒ Protects investors from unregistered brokers
‒ Provides information on liquidity around unlisted securities
‒ Improved investor / Shareholder relations
• For brokers‒ Reduced counter party risk
‒ A centralized platform for price discovery and specialized market data
‒ Access to broad range of asset classes
• For issuers‒ Ability to raise hybrid funds
‒ Increased corporate visibility which brings economies and savings.
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ENTRY AND TRADING
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ADMISSION OF INSTRUMENTS
• Admitting a Company‒ Issuer will comply with all rules and regulations of the NASD
‒ Price quotes are made on a daily basis
‒ Company will be placed in one of two bands (Blue & Pink)
‒ Full register is dematerialised and lodged in CSCS
• Admitting to trade ‒ Initiated by the Investor
‒ Broker fills an application
‒ Issuer consent is not required
‒ Partial dematerialisation of register
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ADMITTING A COMPANY
• Submit Board resolution to list shares on NASD
• Dematerialise securities and create register in CSCS
• Admitting new securities requirements
• Undertake to be bound by the rules of NASD
• Publicly announce listing on NASD
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• Procedure‒ Appoint Issuing House to assist with the listing process (see the List
of the accredited Issuing houses on www.nasdng.com)
‒ Submit completed NASD application form with required
documentation
‒ After due diligence, NASD gives approval in principle to list
‒ Company signs undertaking to abide by rules of market
‒ Share register is dematerialised and sent to CSCS
• Timing is approximately one month
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ADMITTING A COMPANY
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• If security meets requirements, ‒ NASD will request security code and ISIN number from CSCS
‒ CSCS will open account with codes within 3 working days.
‒ NASD informs all stakeholders (Registrars, PIs, Issuer, Public) of
admission .
‒ NASD notifies the participating institution of the Security code and
ISIN number for their necessary action.
• Timing is approximately one week
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ADMITTING A SECURITY
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NASD NSE DIFFERENCE
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NASD NSE Physical trading floor None. Trade is online 13 across Nigeria
Participant codes Starts with 4…. Starts with a letter
CHN Starts with D….. Starts with C….Regulator of Issuers SEC not NASD SEC and NSE
Stocks introduced by Individual shareholders AGM approves
Price limits None Daily cap
Symbol Code Starts with “SD” No unique identifier
Settlement banks Six (6) Many
Trading hours - 9:30 a.m. to 3:30 p.m. 9:30 a.m. to 2:30 p.m.
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OTC MARKET OPPORTUNITIES
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CURRENTLY TRADING ON NASD OTC
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SECURITY Share Capital in Volume Market Cap ARM LIFE PLC
5,785,673,000
15,910,600,750.00
AFRILAND PROPERTIES PLC
250,000,000
137,500,000.00
BGL PLC
12,000,000,000
46,800,000,000.00
CONSOLIDATED BREWERIES PLC
496,071,617
45,142,517,147.00
CENTRAL SECURITIES CLEARING SYSTEM PLC
5,000,000,000
18,000,000,000.00
FRIESLAND CAMPINA WAMCO NIGERIA PLC
976,335,936
419,824,452,480.00 FOOD CONCEPTS PLC
5,650,000,000
11,243,500,000.00
GEO-FLUIDS PLC
4,257,668,000
6,429,078,680.00
GOLDEN CAPITAL PLC
1,170,324,536
1,170,324,536.00
INDUSTRIAL & GENERAL INSURANCE PLC
14,231,238,000
7,115,619,000.00
JAIZ INTERNATIONAL PLC
4,014,429,720
4,616,594,178.00
NIGER DELTA EXPLORATION & PRODUCTION
145,780,311
45,191,896,410.00 PARTNERSHIP INVESTMENT COMPANY PLC
2,875,595,000
5,751,190,000.00
RESOURCERY PLC
2,576,686,039
4,380,366,266.30
RIGGS VENTURES WEST AFRICA PLC
880,394,000
836,374,300.00
SWAP TECHNOLOGIES AND TELECOMMS PLC
2,705,378,000
8,116,134,000.00 TRUSTBOND MORTGAGE BANK PLC
10,945,334,000
13,134,400,800.00
TOTAL
73,960,908,159
653,800,548,547.30
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FUTURE OTC OPPORTUNITIES
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• Equity-linked securities
• Cross border investments
• GDRs, NDRs, Multilayered corporate debt
instruments
• Full range of Derivatives
• Venture capital and Private Equity sell downs
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SPECIFIC INDUSTRY TARGETS
• Agriculture: Rice milling, Dairy products, PE activity‒ Sector to be launched by December 2014
• Power: GenCos, DisCos pre-listing
• Technology: Estimated requirement of ₦1.3trn
• …
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SUMMARY OF FAQS
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NASD/PI FAQ
• Q: WHAT IS NASD?
• A: NASD is an acronym for National Association of Securities Dealers. It is
focused on providing a technologically driven trading platform where
securities not listed on the Nigerian Stock Exchange ["NSE"] are traded.
• Q: WHO REGULATES NASD?
• A: NASD is primarily regulated by the Securities & Exchange Commission
["SEC"] and it is also a self-regulatory organization just like the NSE.
• Q: WHAT IS THE DIFFERENCE BETWEEN NASD AND THE NSE?
• A: The NSE provides the platform for trading on quoted securities while
NASD only deals with un-quoted securities
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NASD/PI FAQ….CONTD
• Q: WHAT IS THE DIFFERENCE BETWEEN QUOTED AND UN-QUOTED SECURITIES?
• A: Quoted securities are securities that are listed/traded on an organized exchange like
the NSE while un-quoted securities are those traded in an OTC market.
• Q: CAN ALL UN-QUOTED SECURITIES THAT CAN BE TRADED ON THE NASD OTC
PLATFORM?
• A: No. Before any un-quoted security can be traded, the Company must have met the
following eligibility criteria:
‒ The security must be registered with SEC
‒ The security must be freely transferable - no legal or regulatory restriction
preventing open trades.
‒ The Company must have been in operation for a year.
‒ It must be a public company or be held by more than 50 beneficial owners.
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NASD/PI FAQ…CONTD
• Q: HOW LONG WILL IT TAKE TO VERIFY THE CERTIFICATES OF COMPANIES WHOSE
SECURITIES ARE UN-QUOTED?
• A: Certificate verification will generally take about 48 hours from the day the
Broker forwards it to the Registrars. However, in some cases where there are issues
on the sellers signature mandate, it may take a little longer
• Q: HOW DO I KNOW IF A SECURITY IS TRADABLE
• A: Please visit our website for the list of Admitted securities
• https://nasdng.com/market/admitted_securities.php
• Q: WHAT IS MOST EFFICIENT WAY TO GET SUPPORT FROM NASD PLC
• A: For quick help you can logon to our website and have a live chat with us
for instant response. You can also reach us on 01-4605008
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CONTACT US
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Office : 9th Floor, UBA House,
57, Marina, Lagos
E-mail: [email protected]
Website: www.nasdng.comLive Chat enabled
Tel. : +234 1 460 5008