Securities and Exchange Commission set to introduce crowdfunding regulation
Nigeria Securities and Exchange Commission, has disclosed plans to introduce regulations on the use of crowdfunding , Director-General, SEC, Ms. Mary Uduk, disclosed while speaking during an interview with journalists ongoing annual meetings of the World Bank and International Monetary Fund in Washington DC.
crowdfunding is a financing method in which money is raised through soliciting relatively small individual investments or contributions from a large number of people by small businesses to raise capital.
According to Ms. Mary Uduk,the move was aimed at protecting investors in the capital market.
She said, With crowdfunding, private companies can raise long-term funds using regulated platforms. The platform of the crowdfunding will be regulated by the SEC.”
Uduk said, “The dual listing of Airtel signifies the interest of the foreign issuers into the Nigerian capital market.
“Consequent to the Airtel IPO, some offshore companies are in discussion with the commission for an IPO that will be dually listed in Nigeria and the United Kingdom.
The market had received a significant boost with the listing of MTN Nigeria and Airtel on the Nigerian Stock Exchange.
Recently, U.S.Securities and Exchange Commission, Regulation on Crowdfunding provides an exemption from the registration requirements for securities-based crowdfunding allowing companies to offer and sell up to $1.07 million of their securities without having to register the offering with the SEC.
If a company would like to offer and sell securities through crowdfunding, they must comply with the federal securities laws. Under the federal securities laws, any offer or sale of a security must either be registered with the SEC or meet an exemption.
With Regulation Crowdfunding, the general public now has the opportunity to participate in the early capital raising activities of start-up and early-stage businesses. Anyone can invest in a Regulation Crowdfunding offering. Because of the risks involved with this type of investing