The Securities and Exchange Commission (SEC) has issued a stern warning to all quoted companies in Nigeria regarding the simultaneous publication of periodic financial returns on their websites.
The Commission handed out the warning in a circular issued on Tuesday to all the companies, noting that sanctions would start from January 2025.
The SEC expressed concern over the practice of companies filing these returns with the SEC and relevant exchanges without concurrently publishing them on their corporate websites.
Contravening rules
This omission, according to the SEC, contravenes Rules 39 and 41 of its Rules and Regulations.
These rules mandate the public availability of such information to ensure transparency and facilitate informed investment decisions.
- The SEC emphasized that the primary reason for requiring website publication is to provide easy and immediate access to crucial financial data for the investing public.
- This access empowers investors to make sound judgments based on up-to-date information. Furthermore, the Commission reiterated the importance of timely disclosures as a cornerstone of effective shareholder engagement.
“In line with the foregoing, effective from January 2025, any public company that fails to comply with the requirement of the referenced Rules in respect of the filing of its periodic returns with the Commission, relevant securities exchanges and the simultaneous placement of same on its website would be penalised as appropriate,” the Commission warned in the circular.
More insights
This directive reinforced the SEC’s commitment to enhancing transparency and promoting investor confidence in the Nigerian capital market.
- By ensuring the prompt and public availability of financial information, the Commission aims to create a more level playing field for all market participants.
- This development is expected to prompt quoted companies to review their disclosure practices and ensure they are aligned with the SEC’s regulations.
- Investors are also advised to leverage these readily available resources on company websites to conduct thorough due diligence before making investment decisions.
What you should know
- In Nigeria, quoted companies are required to file their annual financial results with the Securities and Exchange Commission (SEC) and the Nigerian Exchange Limited (NGX) within 90 days of the end of the accounting year.
- For example, the due date for filing the 2022 audited financial statements was March 31, 2023.
- In addition to filing financial results, companies are also required to publish the financial results in at least two national newspapers within 21 days before the Annual General Meeting
- They are also mandated to post the financial results on the company’s website, with the web address disclosed in the newspaper publications.