SEC To Penalise Companies For Not Publishing Financial Results Online

The Securities and Exchange Commission (SEC) has issued a directive requiring quoted companies in Nigeria to publish their periodic financial returns on their corporate websites alongside submitting them to the SEC and relevant exchanges.

This initiative is aimed at promoting greater transparency and boosting investor confidence in the Nigerian capital market.

In a circular released recently, the SEC expressed concerns over the prevalent practice of companies submitting financial statements to regulatory authorities without simultaneously publishing them online. The commission warned that starting January 2025, any company failing to comply with this directive will face sanctions.

The SEC stated that this practice constitutes a breach of Rules 39 and 41 of its rules and regulations, which are designed to ensure the timely and public availability of financial information. According to the SEC, corporate websites serve as essential tools for providing investors with immediate and unrestricted access to critical financial data. Highlighting the importance of this directive, the commission stated that the move is intended to empower investors by ensuring they have up-to-date information to make sound financial decisions. The SEC emphasised that timely disclosure is fundamental to effective shareholder engagement.

From January 2025, public companies will be penalised if they fail to publish their financial results on their websites at the same time they file them with the SEC and the Nigerian Exchange Limited (NGX). This measure highlights the commission’s commitment to fostering transparency and ensuring that all market participants have equitable access to financial data.

The directive is expected to drive quoted companies to reassess and align their disclosure practices with regulatory requirements. Beyond regulatory compliance, the SEC anticipates that this move will enhance the accessibility of critical information for investors, contributing to a more inclusive and equitable capital market.

Currently, Nigerian companies are mandated to file their annual financial statements with the SEC and NGX within a specified timeframe—90 days after the end of the accounting year. For instance, the deadline for 2022 audited financial statements was March 31, 2023. Additionally, companies must publish these results in at least two national newspapers 21 days before their Annual General Meetings (AGMs) and ensure the results are made available on their official websites. The company’s web address must also be cited in the newspaper publications to facilitate access.

This new directive reaffirms the SEC’s commitment to improving market credibility and strengthening investor confidence. By mandating the simultaneous publication of financial data on corporate websites, the Commission aims to empower investors to conduct thorough due diligence, fostering a sense of trust and reliability within the market.

In another development, the SEC unveiled the #investnigeria enlightenment campaign as part of its strategy to attract more Nigerians to the capital market.

This initiative, launched recently, aims to promote investment through advertising while enhancing public understanding and participation in the market.

At the event, SEC’s Director- General (DG), Dr. Emomotimi Agama, highlighted the campaign’s focus on educating potential investors about the benefits and opportunities within the capital market. He explained that the initiative is designed to improve financial literacy by providing a clear understanding of various investment products, their associated risks, and rewards. Dr. Agama also noted that the campaign seeks to stimulate economic growth, as increased investment in the capital market can drive economic activity, create jobs, and boost Nigeria’s GDP. Additionally, he emphasised that fostering greater participation in the market would enhance financial accessibility and affordability for Nigerians.

Dr. Agama accentuated the broader impact of the campaign on the capital market itself. In attracting more investors, the initiative is expected to increase liquidity and market efficiency while promoting transparency and disclosure. These developments will enhance the market’s competitiveness, encouraging both local and international issuers and investors to participate. He described the campaign as a critical step toward raising awareness, improving financial literacy, and expanding the investor base, ultimately contributing to the nation’s economic development.

The #investnigeria campaign will employ a multi-platform outreach strategy to achieve its goals. Billboards have already been installed in strategic locations across the country, while digital media channels, including social media platforms and online advertising, will be used to reach a broader audience. The SEC also plans to collaborate with financial influencers, bloggers, and thought leaders to amplify its message. Educational events such as seminars, workshops, and conferences will further provide investors with in-depth knowledge. Additionally, traditional and online media coverage will highlight investment opportunities available in the market.

Dr. Agama highlighted the importance of safeguarding investors through education. He stressed that equipping individuals with the knowledge to identify and avoid fraudulent schemes, such as Ponzi scams, is vital for their protection. “Investor protection starts with knowledge,” he stated, adding that it includes understanding what constitutes a safe investment, assessing risks, and distinguishing genuine opportunities from fraudulent ones.

The DG also pointed to the knowledge-driven nature of the capital market, calling for continuous education as a means to empower investors and support market growth. He stressed the need for collaboration with stakeholders across various sectors to extend the reach of the SEC’s educational initiatives and ensure that every part of the country benefits from the campaign’s message.