Akinlabi Emmanuel
NGX Regulation, the regulatory arm of the NGX Group, has suspended trading in the shares of eight companies due to their default in filing their relevant accounts for the year 2023.
This action was communicated in a market bulletin on Monday by Godstime Iwenekhai, the Head of the Issuer Regulation Department, and is effective immediately.
The affected companies include:
- Unity Bank
- C&I Leasing Plc
- Guinea Insurance
- Lasaco Assurance
- Mutual Benefits Assurance
- NPF Microfinance Bank
- Regency Alliance Insurance
- Secure Electronic Technology Plc
Iwenekhai said, “Trading in the shares of the eight companies below have been suspended from the facilities of Nigerian Exchange Limited (NGX or The Exchange) effective today, Monday, 8 July 2024 for not filing their Audited Financial Statements for the year ended 31 December 2023.”
As per post-listing requirements, companies on the Exchange are mandated to submit their accounts and other documents within the specified time frame.
NGX RegCo said that it acted by Rule 3.1 about the Filing of Accounts and Treatment of Default Filing, (Default Filling Rules), which said, “If an Issuer fails to file the relevant accounts by the expiration of the Cure Period, The Exchange will a) Send to the issuer a Second Filing Deficiency Notification within two business days after the end of the Cure Period
“b) Suspend trading in the issuer’s securities, and c) Notify the Securities and Exchange Commission and the Market within 24 hours of the suspension.”
Based on regulatory rules, the suspension on trading in the shares of the affected companies will be lifted once they comply with the required filing rules.
The delays in filing their 2023 annual reports, particularly among insurance companies, have been attributed to the adoption of IFRS 17 standards.
IFRS 17 is a new accounting standard that changes how insurance contracts are accounted for, aiming to provide more transparent and consistent information about insurance contracts.
It requires companies to recognize profits as they deliver insurance services rather than when premiums are received and to disclose information about expected future profits from insurance contracts.
The transition to IFRS 17 involves significant changes in accounting practices and reporting requirements, which may have contributed to the delays in filing annual reports by the affected insurance companies.
Once these companies complete their compliance with IFRS 17 and submit their overdue financial accounts, the suspension on trading in their shares is expected to be lifted, subject to regulatory approval.
