{"id":8861,"date":"2016-10-07T14:44:43","date_gmt":"2016-10-07T13:44:43","guid":{"rendered":"http:\/\/nationalwire.com.ng\/?p=8861"},"modified":"2016-10-07T14:44:43","modified_gmt":"2016-10-07T13:44:43","slug":"cbn-reels-out-guidelines-for-granting-liquid-asset-status-to-sukuk","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/cbn-reels-out-guidelines-for-granting-liquid-asset-status-to-sukuk\/","title":{"rendered":"CBN Reels-Out Guidelines for Granting Liquid Asset Status to Sukuk"},"content":{"rendered":"
\"Godwin<\/a>
Godwin Emiefele, Governor of CBN<\/figcaption><\/figure>\n

CBN Reels-Out Guidelines for Granting Liquid Asset Status to Sukuk<\/h1>\n

The Central Bank of Nigeria (CBN) has reeled-out the guidelines for granting liquid asset status to Sukuk Instruments issued by state governments.<\/p>\n

The apex bank on Friday stated in the document listed on its website that the move was to enhance the diversification of sources of funding for development at the sub-national levels.<\/p>\n

Consequently, members of the public and relevant stakeholders were requested to note the guidelines for operations in the Nigerian financial markets.<\/p>\n

It explained that the Sukuk issuance by any state shall be backed by a law enacted by the relevant State House of Assembly, specifying that a sinking fund to be fully funded from the consolidated revenue fund account of the state be established.<\/p>\n

Also, the state government shall have in place a fiscal responsibility law, with provisions for public debt management, in order to enhance investor confidence. In addition, the state government shall establish a debt management department in order to ensure transparency and professional management of debt issues.<\/p>\n

\u201cThe Sukuk shall, at inception and throughout its tenor, be of investment grade as determined by a rating agency accredited by the Securities and Exchange Commission (SEC). A SEC confirmation that the proceeds have been disbursed in line with the provisions of the prospectus shall be submitted to the Director, Financial Policy and Regulation Department (FPRD) of the CBN at the anniversary of the Sukuk issuance.\\r<\/p>\n

\u201cSubsequently, SEC confirmation shall be required on amounts that have not been disbursed by the first anniversary. Repayment structure shall be from a funded sinking fund account (supported by a legislated irrevocable standing payment order (ISPO) and\/or other legislated sources of repayments disclosed in the offer documents).<\/p>

\r\n
Advertisement<\/div>\r\n\t\t\t\t\t\t\t<\/a>\r\n \r\n\t\t\t\t\t\t\t<\/div>\n

\u201cThe Trustee(s) to the Sukuk shall submit to Director, FPRD, CBN every six months: (a) a statement of accounts of the sinking funds\u2019 investments and (b) a statement of declaration on the sufficiency of the sinking funds\u2019 investments and investment income in meeting maturing and redemption obligations.<\/p>\n

\u201cThe Trustees shall advise the Director, FPRD, CBN on the action taken in the event that the Trustees are of the opinion that the sinking fund may be insufficient or there may be the likelihood of default, in line with Sections 255 and 256 of the Investment and Securities Act, 2007 or any amendment thereto.<\/p>\n

\u201cThe Accountant General of the State shall issue an Irrevocable Letter of Authority to deduct at source from the statutory allocation due to the state, approved by the Federal Minister of Finance, in the event of default by or failure of the state to meet its payment obligations,\u201d the central bank stated in the 11-page document.<\/p>\n

In addition, it stated that the maximum investment a bank shall make in any Sukuk issuance of a state government or its agencies is limited to 10 per cent of the total amount outstanding of that Sukuk. This is an investment limit per issue and not per issuer. Also, the aggregate portfolio of a bank in Sukuk issued by state governments and their agencies shall not exceed 30 per cent of the bank\u2019s total portfolio in debt securities.<\/p>\n

\u00a0<\/strong><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

CBN Reels-Out Guidelines for Granting Liquid Asset Status to Sukuk The Central Bank of Nigeria (CBN) has reeled-out the guidelines for granting liquid asset status to Sukuk Instruments issued by state governments. The apex bank on Friday stated in the document listed on its website that the move was to enhance the diversification of sources …<\/p>\n","protected":false},"author":11,"featured_media":8203,"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":[23,17,624],"tags":[36,1082,740,575],"coauthors":[2392,2393],"class_list":["post-8861","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-business","category-news","category-politics","tag-cbn","tag-fprd","tag-nse","tag-sec"],"yoast_head":"\nCBN Reels-Out Guidelines for Granting Liquid Asset Status to Sukuk - 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\/cbn-reels-out-guidelines-for-granting-liquid-asset-status-to-sukuk\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CBN Reels-Out Guidelines for Granting Liquid Asset Status to Sukuk - National Wire\" \/>\n<meta property=\"og:description\" content=\"CBN Reels-Out Guidelines for Granting Liquid Asset Status to Sukuk The Central Bank of Nigeria (CBN) has reeled-out the guidelines for granting liquid asset status to Sukuk Instruments issued by state governments. 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