The Chairman of the Senate Committee on Capital Market and Institutions, Osita Izunaso, has announced that lawmakers are contemplating a renewed focus on the Private Companies Conversion and Listings Bill. This legislative initiative aims to encourage the listing of more companies on the Nigerian stock market, fostering increased market participation.
In an interview during a legislative retreat in Lagos involving the Senate Committee on Banking, Insurance & other Financial Institutions, and the Nigeria Deposit Insurance Corporation, Izunaso highlighted the importance of the Private Companies Conversion and Listings Bill in enhancing the country’s capital market landscape.
The bill, initially introduced to the National Assembly in 2013, proposes mandatory conversion and listing of private companies that meet specified thresholds across various sectors in Nigeria. The envisioned thresholds include shareholders’ funds exceeding N40 billion, annual turnover surpassing N80 billion, and total assets in excess of N80 billion. The bill also outlines penalties for companies and their directors that fail to comply with the mandatory conversion.
As part of its provisions, the bill suggests offering tax incentives and reliefs on stamp duty and registration fees to companies that undergo the mandatory conversion process. Additionally, it aims to create a framework that encourages private companies to transition to public status, thereby expanding the pool of listed companies in the Nigerian capital market.
While the bill was read for the second time in the House of Representatives in July 2014, its potential impact on market dynamics and participation has brought it back into focus for further consideration by the Senate. The renewed interest in the Private Companies Conversion and Listings Bill reflects an ongoing commitment by policymakers to strengthen Nigeria’s capital market and encourage the growth and development of the financial sector.
