SEC releases new rules on warehousing, collateral management

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SEC releases new rules on warehousing, collateral management

 

The Securities and Exchange Commission (SEC) has released new rules covering warehousing and collateral management to ensure vibrant commodities trading.

The apex regulator stated that every warehouse that stores commodities to be traded on a registered Exchange, shall apply to be registered by the commission.

It added that warehouse applying for registration going by the rule shall submit proof of ownership or registered-lease deed or rent agreement.

A statement by the Commission,  issued to newsmen on Sunday in Abuja said that the move would translate into foreign exchange earnings for the country.

According to SEC, the warehouse would also come along with disclaimer from the owner of the warehouse/property, providing a waiver of ownership regarding commodities stored in such warehouse.

However, SEC stated that in the case of leased or rented warehouse; present evidence of construction in compliance with the National Building Code and have facilities appropriate for storage of commodities.

The rules also said that for a Collateral Management Company (CMC) to be registered by the commission, an application would be filed to SEC, accompanied by the relevant documents.

The commission listed some of the documents required to include two sets of completed SEC forms to be filed by the sponsored individuals and a copy of the Certificate of Incorporation, certified by the Corporate Affairs Commission, among others.

The rule according to the statement, further required Fidelity Bond representing 20 per cent of paid-up capital, sworn undertaken to keep proper records and render returns and evidence of minimum paid-up capital of N50 million.

“The two principal officers of the CMC who shall be registered as sponsored officers must have a minimum of a university degree or its equivalent with not less than 10 years relevant post-qualification experience,” SEC stated.

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