The Securities and Exchange Commission (SEC) has commenced investigation on the technical suspension imposed on the shares of Access Bank by the Nigerian Stock Exchange (NSE).
Technical suspension refers to a former NSE operational practice, where share prices of quoted companies involved in capital raising are freezed from gaining or losing during daily equity transactions.
The News Agency of Nigeria (NAN) reports that the SEC in a statement posted on its website indicated that the suspension contradicted its earlier directive that no company should be technically suspended during such transactions.
“The commission wishes to state that it had in September 2009 directed the NSE to discontinue the practice of placing securities of listed company on technical suspension during capital raising exercise as it is not a best practice,” it said.
The commission also wondered why “no such suspension was placed on the shares of other listed companies who undertook capital raising recently.”
SEC did not name the team probing the NSE but recalled that the exchange had in September 2014 placed the shares of the bank on technical suspension following its proposal to float a rights issue.
It however stated that the NSE had lifted the technical suspension in response to a letter sent to it by the commission on September 23rd, 2014.
“In furtherance of this discontinuance of technical suspension of trading in listed securities in the Nigerian capital market that the Commission directed the NSE on September 23rd, 2014 to immediately lift the technical suspension on the bank’s shares,” it said.
The commission reiterated that no technical suspension should be placed on the securities of any company involved in capital raising in the Nigerian territory in order to avoid unfair market practice.
SEC also reassured the investing public and stakeholders of its commitment to ensure the sustenance of investor confidence and the integrity of the Nigerian capital market.