HoldCo: CBN seeks input into new guidelines
Central Bank of Nigeria (CBN) is seeking input from stakeholders into the draft guidelines for licensing and regulation of financial Holding Companies (HoldCo) in the country.
The apex bank in a memo signed by its Director, Financial Policy and Regulation department, Kevin Amugo said the new licensing rules are coming under the New Banking Model which permits banks/banking groups to retain non-core banking businesses by evolving into a nonoperating (HoldCo) structure.
Under this Model, a nonoperating HoldCo is expected to hold equity investment in banks and non-core banking businesses in a subsidiary arrangement. The arrangement seeks to ring-fence depositors’ funds from risks inherent in non-core banking businesses.
A financial holding company shall beasourceoffinancialandmanagerial strength to the subsidiaries. In serving as a financial and managerial strength to its subsidiaries, a financial holding company shall maintain financial flexibility and capitalraising capabilities for supporting its subsidiaries. of trading activities of the company in the last six months shows that the company met the criteria set by the Exchange. “The Exchange commenced the pilot programme with nine stocks - Dangote Cement, Guinness Plc, Nestle Plc, Nigerian Breweries, SIM Capital Fund, Skye Shelter Fund, Nigerian Energy Sector Fund (NESF) and Total Plc.