The Central Financial institution of Nigeria (CBN) has unveiled tips for licensing and regulation of funds system holding corporations (PSHC), stressing that corporations should exist as non-operating entities within the ecosystem.
The rule of thumb is a follow-up to an earlier template on new license categorisation, which required corporations with an curiosity in switching/processing and cell cash service to arrange holding constructions.
In an accompanying round issued yesterday and signed by the Director, Funds System Administration Division, Musa Jimoh, the CBN insisted that PSHC should keep a minimal of two subsidiaries with a deal with switching and cell cash companies.
The rule of thumb lined broad areas comparable to licensing course of/necessities, possession, company governance, permissible/non-permissible actions and prudential regulation.
“For the aim of this regulation, a PSHC is an organization whose principal object clause embody the enterprise of a holding firm arrange for the needs of creating and managing fairness funding in two or extra corporations, being its subsidiaries, that are funds service suppliers throughout the next classes Cell Cash Operations, switching/processing and cost resolution companies.
“The PSHC shall be non-operating, current solely to hold out funding in accredited subsidiaries with out participating within the day-to-day administration and operations of subsidiaries,” the regulator famous within the new doc.
In response to the Financial institution, the approval course of shall be in two phases – approval-in-principle and ultimate licence. Candidates are required to pay non-refundable utility charges of N1 million for the primary stage of approval and N5 million for the ultimate licence.
Regarding possession, it acknowledged: “Prior approval of the CBN shall be obtained for any shareholding of 5 per cent and above, or any change in possession that ends in a change in command of the PSHC.
“The place such shares are acquired by the secondary market, the PSHC shall apply for approval from the CBN inside seven days of the acquisition.
“Subsidiaries of a PSHC are prohibited from buying shares within the PSHC. Subsidiaries are prohibited from buying shares of different subsidiaries of their guardian PSHC.”
The place a PSHC loses management of any of the 2 funds companies subsidiaries for a interval exceeding six consecutive months, it maintained, “the PSHC shall stop to be a PSHC and will likely be required to return its licence to the regulator for cancellation”.