Nigerian Stock Exchange becomes public company after 11 years in the works

The Nigerian Stock Exchange (NSE) will henceforth run as a public company limited by shares, rather than a private company limited by guarantee of owners or members after consummating a demutualisation process that spanned about 11 years.

The shift makes the NSE the 57th exchange in the world to embrace such a transformation since Sweden’s Stockholm Stock Exchange piloted the move in 1993.

The exchange is at liberty to list its own shares and trade them on the bourse like every other quoted firm now that approvals from market watchdog Securities and Exchange Commission (SEC), and Corporate Affairs Commission (CAC) are now in the bag.

“Under the demutualisation plan, a new non-operating holding company, the Nigerian Exchange Group Plc (‘NGX Group’) has been created,” the NSE said Wednesday in a statement.

“The Group will have three operating subsidiaries, namely: Nigerian Exchange Limited (NGX Limited), the operating exchange; NGX Regulation Limited (NGX REGCO), the independent regulation company; and NGX Real Estate Limited (NGX RELCO), the real estate company. All the entities have been duly registered at the CAC.”

Half a century old, Lagos-based NSE has lived off members’ contributions all its life right from inception in 1960, allowing the members who own the exchange to run it at the same time.

But the new corporate structure will put in place a board of directors to watch over its affairs.

Extending its ownership to the public is hoped to help transform it to a profit-oriented business that should take accountability and commitment to the interests of diverse individual and institutional investors pretty seriously.

It could also be the turning point in corporate governance for an exchange that is sometimes beset with allegations of market abuse, insider dealing and operational compromise.

The road to demutualisation has been bumpy and scaling regulatory hurdles have come at…