
To understand the process of obtaining an asset management license, a quick review of Asset and Asset Management is required.
Simply put, an asset is something that provides value to its owner and the stakeholders it serves; Similarly, Asset Management is the process of outlining and regulating the acquisition, operation, maintenance, restoration, and disposition of corporate assets. This process improves the likelihood of asset delivery and minimizes associated costs and risks.
Asset management is the business of financial institutions managing funds on behalf of institutions, sovereign wealth funds, pension funds, corporations, and other large groups, it is a systematic approach to managing and realizing value from what a group or entity is responsible for throughout its revolution. It can be applied to both tangible assets and intangible assets. Asset management is the systematic process of developing, operating, maintaining, improving, and disposing of assets in the most cost-effective manner.
Asset management takes the approach of increasing total wealth over time by acquiring, managing, and trading investments that have the potential to appreciate in value.
Various asset classes include equities, commodities, bonds, futures, derivatives, real estate, cash, cash equivalents, securities, and mutual funds.
WHAT ARE ASSET MANAGEMENT COMPANIES?
An Asset Management Company (AMC), also referred to as a money manager or money management firm, is a company that invests pooled funds from its clients and develops capital through diverse investments such as stocks, bonds, real estate, and master limited partnerships.
The Asset Management industry in Nigeria is booming due to the growing investment consciousness of many people. The non-retirement market is regulated by the Securities and Exchange Commission (SEC) and includes over 150 operators that manage collective investment schemes.
LEGAL REQUIREMENTS TO OBTAIN AN ASSET MANAGEMENT LICENSE IN NIGERIA.
A basic understanding of the Commission’s Rules and Regulations, as well as the Investments and Securities Act No 29 of 2007 and the Capital Market, is required for to obtain an asset management license.
To apply for a license to operate, an application must be filed with the SEC for processing, while the company`s application for registration must be filed with the Corporate Affairs Commission.
Applicants must also have studied the Commission’s Rules and Regulations, as well as the Investments and Securities Act No. 29 of 2007 and the Capital Market. It is a mandatory requirement for registration.
Suffice it to note that no group in Nigeria is permitted to operate an Asset Management Company unless licensed by SEC.
The Legal requirements for Companies are:
For Companies:
For sponsored individuals:
Note: Managing Director of the Company is to be among the sponsored individuals
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1 The Securities and Exchange Commission, Nigeria
Documents required for Registration as an Asset Manager:
Financial Requirements
The total cost of a fund manager license application is approximately N10,700,000 (10 million, 700,000 nairas).
Forms Required:
Asset manager applicants must obtain and complete the following forms:
In conclusion, the commission may require, any other document it deems necessary for registration purposes.
Written by Kate Nkume for The Trusted Advisors
Email us: info@trustedadvisorslaw.com