{"id":31884,"date":"2019-05-12T19:26:44","date_gmt":"2019-05-12T18:26:44","guid":{"rendered":"https:\/\/nationalwire.com.ng\/?p=31884"},"modified":"2019-05-12T19:29:59","modified_gmt":"2019-05-12T18:29:59","slug":"sec-seeks-to-reduce-cost-of-agm","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/sec-seeks-to-reduce-cost-of-agm\/","title":{"rendered":"SEC Seeks To Reduce Cost Of AGM"},"content":{"rendered":"
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In a bid to ensure that investors get more value for their investments and thereby positively impact on their earnings per share, the Securities and Exchange Commission, SEC is seeking to create a sub rule to regulate the conduct of Annual General Meetings.<\/p>\n

This among others is contained in a draft Exposure of Sundry Amendments to the Rules and Regulations published by the SEC. <\/span><\/p>\n

The sundry amendments are: Proposed amendment to Rule 42 (2)- Half-Yearly Returns, Proposed amendment to Rule 67(2)- Individual Sub-broker and Proposed amendment to Part N Rule 602 \u2013 Miscellaneous Rules<\/span><\/p>\n

Proposed amendment to Part N Rule 602 \u2013 Miscellaneous Rules<\/span>s eeks to create a Sub-rule 4 and 5 pertaining to organization and conduct of annual general meetings.<\/p>\n

The new sub-rule specifically seeks to reduce the cost of organizing shareholder meetings, by making illegal the distribution of gifts to shareholders, observers and any other persons at annual and extraordinary general meetings.<\/span><\/p>\n

Should the rule be agreed on, \u201cpublic companies shall not convene any meeting with select group(s) of shareholders prior to an Annual General Meeting\/Extraordinary General Meeting.\u201d<\/span><\/p>\n

Justifying the proposed rules, the SEC observed: \u201cthat some companies arrange meetings with select groups of shareholders ahead of general meetings to discuss proposed resolutions and agree on strategies which are often detrimental to the interest of other shareholders.\u201d<\/span><\/p>\n

Companies that violate these provisions, the SEC warned, \u201cshall be liable to a penalty of not less than N10m.\u201d<\/span><\/p>\n

The SEC in the Draft, lamented the huge amount spent by such public companies on corporate gifts at AGMs\/EGMs, which greatly impact their profitability.<\/span><\/p>

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It argued that at a time when few companies are making reasonable profits and even fewer can afford to pay dividends, the latest move would positively impact on earnings per share of many if the amount \u201cbudgeted for gifts at AGMs\/EGMs can be reserved for other relevant operational or administrative expenses.\u201d<\/span><\/p>\n

\u201cPublic companies spend a significant amount of money on corporate gifts at AGMs\/EGMs and this has a great impact on their profitability. Few of the companies are making reasonable profits and even fewer can afford to pay dividends. If the amount budgeted for gifts at AGMs\/EGMs can be reserved for other relevant operational or administrative expenses, it would positively impact on their earnings per share\u201d the Rule stated. <\/span><\/p>\n

Furthermore, the Proposed amendment to Rule 42 will lead to the Creation of Sub-rule 190 (3) which states as follows:<\/span><\/p>\n

Public companies shall disclose  some minimum corporate governance information on their websites including governance structure, composition and structure of the board, shareholding and Dividend analysis among others.<\/span><\/p>\n

Justifying this amendment, the SEC said as part of the Corporate Governance Scorecard implementation strategy, companies are expected to disclose a Minimum Corporate Governance Report on their websites. The information is expected to be structured to contain reasonable Corporate Governance information on the public companies.<\/span><\/p>\n

On the Proposed Amendment to Rule 67(2)- Re-instatement  of Individual Sub-Broker Function the SEC said the deletion of Rule 67 (2) in November 2017 generated a lot of comments from the Nigerian Stock Exchange (NSE) and Association of Stock Broking Houses (ASHON), who thereafter requested for the reinstatement of the function. <\/span><\/p>\n

\u201cThe Rules Committee revisited the issue and the Commission agrees that reinstatement of Individual Sub \u2013 broker function will help in enhancing financial inclusion, deepening the market, and attracting more retail investors as well as enable the Sub \u2013 brokers have more presence at the grass root level\u201d. The SEC added.<\/span><\/p>\n

Photo Caption: From Left–Board Member,  Private Equity and Venture Capital Association  Nigeria, Mrs Folake Elias-Adebowale, Chairman PEVCA  Mr Paul Kokoricha , <\/span>Acting Executive Commissioner, Operations, Securities and Exchange Commission Mr Isyaku Tilde and  Executive Secretary  PEVCA, Mrs Ify Ossi  during a Meeting between PEVCA  and SEC in Abuja weekend<\/strong><\/em><\/p>\n

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In a bid to ensure that investors get more value for their investments and thereby positively impact on their earnings per share, the Securities and Exchange Commission, SEC is seeking to create a sub rule to regulate the conduct of Annual General Meetings.<\/p>\n","protected":false},"author":6,"featured_media":31886,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[23,1593,17,624],"tags":[575],"coauthors":[2391],"class_list":["post-31884","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-business","category-metro","category-news","category-politics","tag-sec"],"yoast_head":"\nSEC Seeks To Reduce Cost Of AGM - National Wire<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalwire.com.ng\/sub\/sec-seeks-to-reduce-cost-of-agm\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SEC Seeks To Reduce Cost Of AGM - 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