The Securities and Exchange Commission, SEC, has released new requirements for companies applying to act as Nominees for asset owners in Nigeria.

Unlike in the past, SEC stated: “a Nominee Company shall have a minimum of three sponsored Individuals, one of whom shall be a compliance officer; b) The Managing Director of the Company shall at all times be among the sponsored individuals by complying with the requirements for registration of sponsored individuals; c).

“A Nominee Company shall have the necessary infrastructure, including vaults for the safe custody of title documents, agreements, etc., and information technology capability required to effectively discharge its functions”.

In the case of merger/acquisition, SEC stated: “Within 24 hours, in the event that its registration is suspended/revoked, notify all its clients including custodians of the suspension/revocation and their obligation to appoint another Nominee Company within 90 days from the effective date of suspension/revocation. Where any client fails to appoint another Nominee, the Commission shall appoint another Nominee to take over custody of the assets.

“In the event of a decision by the Nominee Company to discontinue business, notify the Commission and its clients within 24 hours. The Nominee Company shall notify the clients of their obligation to appoint another Nominee within 90 days from the date of the notice and the Nominee Company shall transfer assets to the appointed Nominee of the clients within 5 working days, failing which the Commission shall appoint a Custodian.”

It added: “Comply with the Commission’s Rules on withdrawal of registration before the decision to discontinue business shall be effective. A Nominee Company shall comply with the Commission’s Rules on internal controls; monitoring, review, evaluation, and inspection of systems and controls; separate custody account; agreement with the client; preservation of records and disclaimer of liability.”