CHAMWE KAIRA
Members of the Namibia Securities Exchange (NSX) have approved all the resolutions presented at a special general meeting to advance the demutualisation of the exchange.
Demutualisation is the process where a private, member-owned organisation changes its legal structure to become a publicly traded company owned by shareholders.
The approval represents a significant milestone in a process first endorsed by NSX members in 2015. The process has since become a statutory requirement following the commencement of the Financial Institutions and Markets Act of 2021 (FIMA) on 1 May.
Members approved the conversion of the NSX into a public company with share capital, the allotment of shares to the initial shareholders, the memorandum and articles of association for the new corporate structure, and the related implementation arrangements.
“Today’s approval is an important step forward in a process that has been carefully developed over a number of years,” said Tiaan Bazuin, the chief executive officer of the NSX.
“It demonstrates the support of our members for the continued modernisation of the NSX, and the establishment of a governance and ownership structure suited to a modern, regulated securities exchange.”
Demutualisation will change the NSX from its historic structure as a non-proprietary voluntary association of rights holders into a public company with share capital.
It will also separate ownership of the exchange from membership and the right to access its services.
The new structure will bring the NSX in line with international practice and strengthen the separation between its commercial activities and its responsibilities as a self-regulatory organisation.
Appropriate safeguards will also be implemented to manage potential conflicts of interest and prevent any single shareholder or category of shareholders from exercising disproportionate control over the exchange.
The transition will place the NSX on a similar corporate footing to the companies it serves and regulates, while providing greater strategic flexibility to support its future development.
As a public company, the NSX will also be better positioned to access capital and respond to future opportunities in Namibia’s financial markets, subject to the necessary approvals.
Importantly, demutualisation does not mean that the NSX is being wound up or that its business is being transferred to an unrelated entity.
The exchange will continue as the same legal institution, and its operations, assets, liabilities, agreements, employees, rights, obligations and regulatory responsibilities will continue. The principal changes will be to its legal form, ownership and governance structure.
The passing of the resolutions does not, in itself, complete the demutualisation.
The NSX will now finalise the outstanding requirements prescribed under NAMFISA’s Demutualisation of a Self-Regulatory Organisation Standard, issued under FIMA.
This will include completing the required supporting documentation, governance arrangements and prescribed public-notice and inspection process.
Once these requirements have been completed, the NSX will submit its formal demutualisation application to the Namibia Financial Institutions Supervisory Authority (NAMFISA) for regulatory consideration and approval.
“Our immediate focus now turns to completing the prescribed regulatory requirements and preparing the formal application to NAMFISA,” said Bazuin.
“Throughout the remaining process, the NSX will continue to prioritise regulatory independence, market integrity and the uninterrupted operation of the exchange.”
