New Rule and Sundry Amendments to the Rules and Regulations of the Commission

NEW RULE: GREEN BONDS

1.0 Name/Citation of the Rule: Green Bonds
1.1 Definition of Terms
“Green Bond” A Green Bond is any type of debt instrument, the proceeds of which would be exclusively applied to finance or re-finance in part or in full new and/or existing projects that have positive environmental impact.
“Look-Back” Look-back refers to a maximum period in the past that an issuer will ‘look back’ to in order to identify assets/earlier disbursements to such ‘eligible green projects’ that will be included in the green bond reporting.
2.0 Qualification
To qualify as a green project, the monies shall be invested in one or more of the following: a) Renewable and sustainable energy b) Clean transportation c) Sustainable water management d) Climate change adaptation e) Energy efficiency f) Sustainable waste management g) Sustainable land use h) Biodiversity conservation i) Green buildings (Commercial Real Estate Development) j) Any other categories as may be approved by the Commission from time to time.
3.0 Conditions for approval of a Green Bond
In addition to the general registration requirements for debt issuances as stated in the Rules and Regulations of the Commission for States, Local Governments, Government, Corporate and Supra-national agencies, an issuer of a Green Bond shall file: i. A letter from the issuer committing to invest all the proceeds of the bond in projects that qualify as green project(s) or assets in line with this rule ii. A feasibility Study and Report stating clearly, the measurable benefits of the proposed Green project or Assets such as Green House Gas reduction, reduction of water use and reduction of harmful emissions. iii. A prospectus which shall include project categories, project selection criteria, decision-making procedures, environmental benefits, use and management of the proceeds. iv. An independent assessment or certification issued by a professional certification authority or person approved or recognized by the Commission. v. Any other documents that may be required by the Commission
4.0 Utilization and Management of Proceeds
i. The net proceeds shall only be utilized for the purpose stated in the approved offer documents and shall be tracked as stated in the approved internal policy of the Issuer which shall be disclosed in the offer documents. ii. An escrow account shall be opened specifically for the net proceeds of the offer. iii. The proceeds shall be domiciled with the Custodian and the Trustees shall ensure that the proceeds are used for the purpose stated in the prospectus. iv. The issuer and the Trustees shall be the signatories to the escrow account. v. The issuer shall invest proceeds in green projects within the given timeframe prescribed in the prospectus. vi. Unallocated proceeds shall be invested by the Trustees in money market instruments with investment grade rating that do not include greenhouse gas intensive projects which are inconsistent with the delivery of a low carbon and climate resilient economy.
5.0 Reporting
i. The issuer shall provide to the Commission and Stock Exchange (where listed), at least annually, a Green Bond Report containing the list of the projects and assets to which proceeds have been allocated, for the duration of the bond. The reporting process and authority shall be documented and maintained as part of the issuer’s Green Bond Framework. The Green Bond Report shall include: A. A brief description of the projects and the amounts disbursed, including (where possible) the percentage of proceeds that have been allocated to different eligible sectors and project types and to financing and refinancing. Where confidentiality agreements or competition considerations limit the amount of detail that can be disclosed, the information may be presented in generic terms. B. The expected impact of the project and assets C. Qualitative performance indicators and, where feasible, quantitative performance measures of the impact of the projects D. The methodology and underlying assumptions used to prepare performance indicators and metrics shall be disclosed. ii. The issuer shall publish an assessment report issued by an independent professional assessment or certification agency on its website or other media and conduct and report annual follow-up assessments of the green projects and associated environmental benefits throughout the tenor of the bond and publish same in its annual report and on its website or other media, a copy of which should be filed with SEC.
6.0 Refinancing
Where the issuer proposes to utilise a proportion of the issue proceeds of the issue of Green Bonds, towards refinancing of existing green assets, the Issuer shall clearly provide in the offer document the details of the portfolio/assets/projects which are identified for such refinancing, and, to the extent relevant, the expected look-back period for refinanced projects.

SUNDRY AMENDMENTS

A. INCLUSION OF BVN AS A VALID MEANS OF IDENTIFICATION OF INDIVIDUAL CLIENTS IN THE CAPITAL MARKET Amendment (Creation of a new sub-rule: Section 46(2)(b):
The Capital Market Operator may use the Bank Verification Number (BVN) as a means of verifying information provided by the clients.
B. RULES ON INVESTMENT ADVISORY SERVICES
[... content regarding ethical duties, risk assessment, suitability, and record-keeping for investment advisers ...]
C. AMENDMENT TO RULE 61-NOMINEE ACCOUNTS
[... requirements for operating nominee accounts, client consent, and reporting ...]
D. AMENDMENT TO RULES 96 & 97– INVESTMENT ADVISERS [... new exemptions to registration and qualification/certification requirements for investment adviser representatives ...]