When it comes to fund investment, a portfolio manager plays an extremely significant role. A portfolio manager is a person or organization responsible for investing fund assets, putting the fund’s investment objectives into practice, and overseeing daily portfolio management.
Building and managing a portfolio entail selecting investments that will satisfy an investor’s long-term financial objectives and risk tolerance.
In Nigeria, any company that manages investment portfolios for clients or retail investors (including stocks, bonds, etc.) or invites the public to invest for return on investment (“ROI”) in any area of commerce must have the fund/portfolio manager’s license, which is issued by the Securities and Exchange Commission (SEC).
If done correctly, getting a fund/portfolio management license is a painless process. The SEC will process the application for an operational license while the Corporate Affairs Commission (“CAC”) will handle the application for the company’s registration. An overview of the criteria and process for submitting an application for an operating license is provided below.
REQUIREMENTS TO OBTAIN A FUND MANAGER OPERATING LICENSE IN NIGERIA
A Form SEC 3 application for registration as a fund/portfolio manager must be submitted together with the following materials:
- The sponsored people must submit two complete sets of Form SEC 3
A copy of the Certificate of Incorporation that has been certified by the Corporate Affairs Commission; (original copies will be sighted);
- a copy of the company’s Memorandum and Articles of Association. This will, among other things, entail the authority to manage a fund or portfolio;
- a copy of the CAC Form, which includes information on the directors who have been authorized by the Corporate Affairs Commission;
- a copy of the Company’s most recent audited accounts or statement of affairs;
- A Fidelity Bond equal to 20% of paid-up capital;
- a solemn commitment to maintain accurate records and submit returns;
- proof of a minimum of N20 million in paid-up capital.
FEES REQUIREMENT
The overall cost of the license application for a funds manager is around N10,700,000 (Ten Million, Seven Hundred Thousand Naira).
The particular costs are as follows:
- Application/filing fees are N100,000 (One Hundred Thousand Naira);
- Processing fees are N300,000 (Three Hundred Thousand Naira);
- Registration/License Fee: N10,000,000 (Ten Million Naira);
- Sponsored Individual Fee: N100,000 (One Hundred Thousand Naira) for each sponsored individual
Also note that a for a company to apply for the operating license, it must have a minimum share capital of N150,000,000 (One Hundred and Fifty Million)
In conclusion, a fund manager’s license application is considered to have been properly submitted to the Securities and Exchange Commission (SEC) when all fees have been paid, all necessary documents and information have been provided, all questions have been resolved, and nothing else is still outstanding.
Written by Olawaunmi Ojo for The Trusted Advisors
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