General news

SEC releases rules on crowdfunding, pegs paid-up capital at N100m

Published

on

The Securities and Exchange Commission (SEC) has released proposed rules for crowdfunding to foster economic development and to deepen the capital market.

The rule obtained by the Nigeria News Agency in Lagos on Sunday showed that the required minimum paid-up capital for operating a crowdfunding portal was pegged at N100 million.

Crowdfunding is the process of raising funds to finance a project or business from the public through an online platform.

Crowdfunding portal is a website, portal, intermediary portal, application, or other similar module that facilitates interaction between fundraisers and the investing public.

The commission said, “A proposed rule has been developed to provide a regulatory framework permitting private companies with the required structure and mechanism in place to raise capital from the public through crowdfunding.”

It noted that Micro, Small and Medium Enterprises (MSMEs) incorporated as a company in Nigeria with a minimum of two-years operating track record should be eligible to raise funds through a crowdfunding portal registered by the commission.

According to the commission, total fees payable to parties to a crowdfunding issue shall not exceed two per cent of the total funds raised.

The commission noted that the maximum amount which might be raised by a medium enterprise shall not exceed N100 million.

“The maximum amount which may be raised by a small enterprise shall not exceed N70 million; and the maximum amount which may be raised by a micro enterprise shall not exceed N50 million.

“The limits set forth above shall not apply to MSMEs operating as digital commodities investment platforms or such other MSMEs as may be designated by the commission from time to time,” it said.

The commission explained that retail investors might not invest more than 10 per cent of their annual income in a calendar year.

According to the rule, crowdfunding portal that is located outside Nigeria will be considered as actively targeting Nigerian investors, if the operator or the operator’s representative, promotes directly or indirectly the platform in Nigeria.

It stated that a crowdfunding portal might be registered and operated only by an operator registered with SEC as a Crowdfunding Intermediary.

The rule added that only entities registered with the Commission as an Exchange, dealer, broker, broker/dealer or alternative trading facility as prescribed under the Act and the SEC Rules and Regulations might be registered as a Crowdfunding Intermediary.

It added that crowdfunding portal or crowdfunding intermediary that failed to comply with the rules shall be liable to a fine of not less than N1 million and the sum of N10,000 for every day the violation continues.

Edited By: Adeleye Ajayi
(NAN)

Chinyere Nwokeoma

Chinyere Nwokeoma: is a graduate and a professionally trained journalist, with experience in national news reporting/editing and verification at the News Agency of Nigeria. NNN is a media subscriber of the News Agency of Nigeria. NNN is a Nigerian online news portal that publishes breaking news in Nigeria, and across the world. Our journalists are honest, fair, accurate, thorough and courageous in gathering, reporting and interpreting news in the best interest of the public, because truth is the cornerstone of journalism and they strive diligently to ascertain the truth in every news report. Contact: editor[at]nnn.ng. Disclaimer.

Latest News

Innovation Accelerator to Stimulate Growth for Youth Promoting Democracy and Governance in Africa Concludes President’s Remarks at the 5th Annual Meeting of the Africa Economic Zones Organization (AEZO) December 3, 2020 Coronavirus – Africa: COVID-19 Update (3rd December 2020) Coronavirus – Zimbabwe: COVID-19 Update (2nd December 2020) Coronavirus – Zambia: Daily status update (2nd December 2020) Landmark Alliance Launches in Africa to Fight COVID-19 Misinformation Democratic Republic of Congo (DRC)’s President H.E Félix Tshisekedi confirmed to deliver the keynote address at Mining Indaba Virtual Local Currency Financing for Off-Grid Energy Solutions in Africa Limited, Needs Scaling Up – African Development Bank Report MEDIA ADVISORY : African Institute for Mathematical Sciences to Host Online Next Einstein Forum Global Gathering: 8-10 December 2020 AIMS to host its first online Next Einstein Forum Global Gathering SAP becomes the perfect medicine for Kiara Health’s complexities and cost challenges Blue Prism Intelligent Automation Now Available in AWS Marketplace WHO Africa Online Press Briefing: Responding to COVID-19 Misinformation in Africa Coronavirus – Kenya: Distribution of Cases by Counties (2 December 2020) Coronavirus – Kenya: COVID-19 updates (2 December 2020) SouthBridge Group announces Two Major Transactions in the Republic of Togo Fabio Aru signs for Team Qhubeka ASSOS Zimbabwean journalist Debra Matabvu wins the 2020 APO Group African Women in Media Award Signing of the Advisory Services Agreement between the Islamic Corporation for the Development of the Private Sector (ICD) and Xalq Bank, Uzbekistan African Energy Chamber Starts a Working Visit to Mozambique to Push for Natural Gas Adoption and Jobs Creation UN Global Compact partners with African Media Agency (AMA) on Virtual SDG Summit Over 3.3 million children vaccinated in Chad in large-scale polio campaign How the world’s highest HIV-prevalence country turned around, and in record time World’s governments must wind down fossil fuel production by 6% per year to limit catastrophic warming Gruesome Boko Haram Killings in Northeast Nigeria Foreign fighters a ‘serious crisis’ in Libya, UN mission chief tells high stakes political forum Ethiopian Government and UN strike deal for ‘unimpeded’ humanitarian access in Tigray Mali: COVID-19 and conflict lead to rise in child trafficking AERC to host Bi-annual Plenary on the COVID-19 Pandemic and Public Finance in Africa African Union to Launch the African Single Electricity Market (AfSEM) Communiqué on H.E. Moussa Faki Mahamat, Chairperson of the African Union Commission's two day working visit to the Republic of South Africa Coronavirus – Malawi: COVID-19 Daily Information Update (1st December 2020) Rugby: The General Assembly of the Rwanda Rugby Federation (RRF) Elected New Conflict and Resolution Committee Lionesses Graduate from Isuzu East Africa (EA) Life Skills Program Ecobank Group wins Awards from EMEA Finance, The Banker and Global Finance COVID-19 drives wages down, new International Labour Organization (ILO) report finds Coronavirus – South Africa: MEC Anroux Marais on suspension of summer initiation season due to Coronavirus COVID-19 pandemic Coronavirus – South Africa: COVID-19 statistics in South Africa (01 December 2020) Brown, Tanfield and Vinjebo sign-on for Team Qhubeka ASSOS Coronavirus – Nigeria: COVID-19 case update (1 December 2020) Coronavirus – Zambia: Daily status update (1st December 2020) Uniting Business for A Stronger Africa Coronavirus – South Africa: COVID-19 update for South Africa (1 December 2020) Coronavirus – Kenya: Distribution of Cases by Counties (1 December 2020) Coronavirus – Kenya: COVID-19 updates (1 December 2020) Coronavirus – Ethiopia: COVID-19 reported cases in Ethiopia (1 December 2020) Coronavirus – Zimbabwe: COVID-19 Update (1 December 2020) Nestlé partners with Nomanini and Standard Bank to empower informal retail traders across the Eastern and Southern Africa Region LaLiga signs Mondia group as strategic technology and commercial partner for Europe, Middle East, Africa and Asia Pacific African Energy Chamber projects Africa’s Power Demand to Keep Rising Between 4-5% per year