Here in this post, we are going to take time to list and explain in detail the 7 functions of issuing houses in Nigeria. This is both incisive and rich in information.
Issuing house is simply a financial house formed for the purpose of serving as a financial adviser to companies, and these companies may be either quoted companies and/or unquoted companies.
Issuing house can also serve as financial adviser to federal government agencies and government institutions and as well, to state governments in Nigeria, that seek to raise additional money for the purpose of developing their capital projects, for example, capital projects such as, roads project, and schools project, and hospitals project, and other infrastructure projects among other projects from the Capital Market.
The Issuing house in Nigeria served both the small and the big companies. It served as financial adviser, stockbroker, etc. and almost all the companies the Issuing house is working for or advising are those companies that are listed on the Nigeria Stock Exchange floors. Besides, however, most of the functions of the Issuing house in Nigeria will be discussed in this article.
What Are The Functions Of Issuing Houses?
An Issuing house was established primarily for the purpose of serving as financial adviser to companies, both big companies and small companies, as well as, government agencies and government institutions particularly when these companies or maybe a state government needs some additional funds to finance its capital projects from the capital market.
Nevertheless, in this article, I am going to discuss or explain some of the functions of the Issuing house in Nigeria, and here they are:
1. Issuing House Advises Companies And Would-Be Companies Financially
Apart from big companies and government agencies and institutions, the activities or functions of the Issuing house in Nigeria goes as far as, advising financially and stockbroking the would-be companies that are desiring to be among the companies that are listed on the floors the NSE, that is, the Nigeria Stock Exchange, sometimes through what is called, ‘Initial Public Offerings’ (IPOs).
That is why one will see an Issuing house providing advice on those areas that are most favourable financial and capital structure.
2. Issuing House Liaises With Regulatory Bodies And Authorities
We are told that an Issuing house is saddling with the responsibility of advising companies and organizations and even government financially.
In the process of rendering its functions, the Issuing house also liaised with regulatory bodies and agencies, as well as, other authorities in order to carry out its functions effectively with a view to attaining the purpose for which, the Issuing house was established.
More so, the Issuing house has to make sure that, it coordinates every activity of every party involved in its business, for the purpose of ensuring a successful exercise. Accordingly, to this regard, the Issuing house also handled every document necessary for its day to day activity.
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3. Issuing House Helps Companies To Raise Working Capital
One of the functions of the Issuing House is to help companies in raising working capital. So what the Issuing house does is to make sure that, it extends to those companies, who want additional money as a working capital through private placements from interested members of the public, who may wish to invest in these companies.
In a situation like this, what is expected of the Issuing house, is to advise the companies, they will also ensure that, they develop strategy, and timing, as well as, steps necessary to ensure that, there is legal and regulatory compliance by the players.
More so, it is also the function of the Issuing house to draft the placement memorandum document and after drafting of such documents, the Issuing house has to market the documents so as to attain maximum success in its transactions.
4. Issuing House In Nigeria Issues Bonds
Issuing house in Nigeria also saddled with the responsibility of issuing bonds. In fact, issuing of bonds becomes one of the functions of the Issuing house, since bonds is an ‘interest-bearing debt’ security and instrument, that is issued by corporate organizations, as we as, agencies of government for the purpose of funding capital projects, and projects expansion, such as infrastructure development. This responsibility rest on the shoulders of the Issuing house in Nigeria.
5. Issuing House Offers Comprehensive And Active Advisory Services
The offering of advisory services remained one of the functions of the Issuing house in Nigeria. Therefore, what the Issuing house does is to make sure that it offers comprehensive and active advisory services to those companies, who need their advice.
Such advice rendering by the Issuing house will, for the most part, help clients of the Issuing house to make good and sound financial decisions, as well as, execute such decisions in different market locations and conditions. This is one of the major functions of the Issuing house in Nigeria.
6. Issuing House Provides Clients With Tailor Made Solutions
Issuing house in Nigeria offers a range of services to its clients, and one of such services is to equip its clients through its Advisory Services Team, with a competitive edge via the provision of ‘tailor-made solutions’ to them.
The Issuing house also provides to its clients a complete range of products of investment banking, which of course, leverage on its thorough knowledge of the national and international capital market, and world-class research platforms and strategic alliances.
This is what makes the Issuing house to open its doors, as well as, find the right or good contacts for its clients. To be frank, it is also the function of the Issuing house to make provision for custom-made solutions, such that must be tailored to its client’s needs.
7. Issuing House Provides Investment Banking Services
Another function of the Issuing house in Nigeria is to provide investment banking services to its clients. Through its Advisory Services Team, the Issuing house will provide a wide range of services, such as, highly regarded services that have to do with investment banking to financial houses sector.
For instance, financial houses such as banks, and insurance companies, and mortgage institutions among other financial houses, plus oil and gas, as well as, manufacturing.
The Issuing house in Nigeria served both the small and the big companies. It served as financial adviser, stockbroker, etc. and almost all the companies the Issuing house is working for or advising are those companies that are listed on the Nigeria Stock Exchange floors.
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