Regulatory Alerts2022-03-03
Circular to Issuing Houses on No-Objection Letters for Transactions
The Securities and Exchange Commission requires issuing houses to obtain and file a No-Objection letter from primary regulators, particularly in banking and insurance, as a prerequisite for approving proposed transactions. This mandatory reference letter must confirm the absence of material financial statement changes since the last accounting year-end, list current board members, and explicitly approve the proposed issuance. Applications submitted without this letter will be deemed incomplete and withheld from processing, a change designed to accelerate the Commission transaction turnaround period.
The Securities and Exchange Commission (“the Commission”) hereby draws the attention of Issuing Houses to the due diligence requirement for a “No-Objection” letter from “primary regulators” of Issuers, especially those in the Banking and Insurance sectors, as a prerequisite for the Commission’s approval of proposed transactions. In a bid to further improve the Commission’s transaction turn-around period, Issuers would henceforth be required to obtain the reference letter of “No-Objection” from their respective primary regulators and file same along with other application documents presented to the Commission. The letter of No-Objection should cover the following: Confirmation that there has not been any material change(s) in the financial statements of the Issuer/Sponsor from the last accounting year end to date; Names of current members of the Board of Directors; and No objection to the proposed issuance. Please be informed that where in relevant instances, an application is not accompanied by a letter of “No-Objection”, such submission will be considered to be incomplete and would not be processed.