The Securities and Exchange Commission (SEC) has laid down new regulations regarding warehousing and collateral management in a bid to shake up the country’s trading ecosystem.
The new regulations on warehousing state that all warehouses should be situated in places with infrastructure that will aid its operations.
They are also required to declare a Standard Operating Procedure (SOP) that will cover various procedures that align with industry standards.
It states, “The warehouse should be located in a place with access to infrastructure to support its operations and have sufficient space for parking and movement of large vehicles, have an efficient system for loading/unloading of Commodity including proper mechanism for segregation of different kinds/quality of Commodity”.
“They are to submit a Standard Operating Procedure (SOP) which shall cover the following among others: Procedures for acceptance of commodities to be deposited and delivery of commodities; procedures for weighing, sampling of goods to be deposited in compliance with industry standards, procedure for verification of commodities and communication to depositors, and procedure for maintaining the quality of the goods stored in line with relevant specifications.
“Others are procedure for Know your depositor, security policy for ensuring the safety of the goods, procedure for the use of modern techniques for storage of goods, procedure for determining and addressing losses due to theft, fire, burglary, fraud, negligence and force majeure events, procedure for internal verification of stock, procedure for maintenance of warehouse and preservations of Stock, Organizational structure and Job description for every staff”.
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It added, “The two principal officers of the Collateral Management Company who shall be registered as sponsored officers must have a minimum of a university degree or its equivalent with not less than ten (10) years relevant post-qualification experience; a list of key officers and technical experts engaged and details of their qualifications, which should capture evidence of financial, technical capabilities to carry out the functions of a Collateral Manager, a list of relevant technology systems in place as required by collateral management services; information relating to the relevant Commodities Management Facilities including: Assaying facilities, Warehousing, Aggregation, Computerization and Telephone systems and a well finalized Business Plan;
“Two copies of existing or proposed by-laws or rules, Code of Conduct, Warehousing Guidelines etc., instruction and inspection manuals of warehouse activities; detailed information about the promoters and principal officers of the Collateral Management Company; two copies of Warehouse Accreditation requirements of the Collateral Management Company; detailed information about the Technology system to be adopted; and an Undertaking by the CMC to always forward copies of amendments of its Guidelines for approval by the Commission.”
