A brief history about CMO’s in Nigeria.
A Collective Management Organization is a body empowered by law to oversee the monitoring, licensing and exploitation of performance and mechanical rights for their clients. They also collect and distribute any subsequent royalties accruing from the management of their clients rights.
In Nigeria, the first ever CMO was established in 1970 known as the Performing and Mechanical Rights Society of Nigeria (PMRSN) to administer performance and mechanical rights. In 1984, it got replaced by the Musical Copyright Society of Nigeria (MCSN). In 1994, NCC established and approved the formation of the Performing and Mechanical Rights Society (PMRS) to administer both performance and mechanical rights. In 2000, stakeholders agreed to merge existing CMO’s for better efficiency. By 2010, the Copyright Society of Nigeria (COSON) was registered.
Disappointingly, by 2017 NCC had COSON suspended due to internal governance issues. In 2018, the Federal High Court dismissed COSON’s suit brought against MCSN to block the organization from operating as a CMO.
The Collective Management Regulations (CMR), 2025, issued by the Nigerian Copyright Commission (NCC) under the Copyright Act, 2022, came into force on January 28, 2025. These Regulations are a comprehensive overhaul of the previous 2007 framework, designed to inject greater accountability, transparency, and efficiency into the collection and distribution of royalties for rights holders in Nigeria. They significantly strengthen the NCC’s oversight powers and introduce robust governance and financial integrity measures for Collective Management Organizations (CMOs).
N.B:
Collective Management Regulations (CMR)
Nigerian Copyright Commission (NCC)
Collective Management Organizations (CMOs)
I. Foundational Principles & Core Functions
Objective (Regulation 1): The Regulations aim to provide a detailed legal framework for the approval, membership, management, and obligations of CMOs, indicating a move towards a highly regulated and standardized collective management landscape.
Legal Authority: The Regulations derive their authority from sections 78(2)(d), 97(1), and 97(1)(c) of the Copyright Act, 2022.
Functions of a CMO (Regulation 2): CMOs are mandated to administer rights, monitor exploitation, negotiate and grant licenses, collect and distribute royalties, assist members in enforcement, and provide social, cultural, and educational services. This defines their comprehensive role in the ecosystem.
II. Approval, Revocation, and Renewal of CMOs
These sections impose stringent requirements to ensure the legitimacy and operational capability of CMOs.
Grant of Approval (Regulation 3):
Companies seeking to operate as CMOs must apply to the NCC using a prescribed form.
Key Requirement: Applicants must submit their CAMA registration certificate, Memorandum & Articles of Association, a statement of intended rights/category of owners, and, critically, signed consent from at least 100 right owners within their specified class. This high threshold aims to prevent “sham” CMOs and ensure a genuine mandate.
Validity: Initial approval is for five years, renewable every three years, ensuring regular reviews.
Revocation of Approval (Regulation 4): The NCC can revoke approval if a CMO loses its legal status, ceases to represent its approved class of copyright owners, if previously undisclosed facts emerge that would have warranted refusal, or if it fails to comply with a suspension directive within six months. Written notification with grounds is mandatory.
Renewal of Approval (Regulation 5): CMOs must apply for renewal three months before expiry, submitting an activity report, an updated member list, details of Board/management changes, and a statement of royalties collected and distributed. Renewal is contingent on substantial compliance with the Act and Regulations. Refusal requires written notification of grounds.
III. Membership: Rights, Information, and Mandates
These provisions significantly empower rights holders and enhance their control and access to information.
Eligibility & Acceptance (Regulation 6): Any copyright owner in the CMO’s approved category is eligible. CMOs must accept members fulfilling criteria, and any refusal must be justified in writing within 30 days.
Information to Right Owners (Regulation 7): CMOs must provide comprehensive information on membership, terms, scope of rights transferred, mandate restrictions, termination implications, succession, internal governance rules, meeting rules, and deduction policies, ideally electronically. This section also explicitly allows for collective membership through associations or agents.
Scope of Mandate (Regulation 8):
Rights owners must give written consent for each specific right or type of work.
A critical provision: rights owners cannot grant the same rights within the same territory to more than one CMO, preventing overlapping claims.
CMOs cannot impose conditions requiring members to appoint them as sole collecting agents or mandatorily assign rights to collect from foreign CMOs, thus preventing monopolistic practices.
Fair & Equitable Treatment (Regulation 9): A foundational principle mandating fair and equitable treatment of all represented rights owners.
Withdrawal of Membership (Regulation 10): Members can withdraw their membership or assigned rights upon notice. Existing licensing contracts remain valid until the end of the financial year of withdrawal, and the withdrawing member retains distribution rights and access to financial information for that period.
Rights of a Member (Regulation 11): This regulation details member participation:
Internal rules must ensure member involvement in decision-making, including voting rights, eligibility for positions on governing bodies, and attendance at the General Meeting.
Weighted voting rights are permitted based on objective criteria like catalogue size or royalties earned.
Proxy voting is allowed, but a proxy cannot represent more than 10 members.
CMOs must provide annual information including audited financial statements, Governing Board reports, and remuneration paid to Directors (certified by auditors).
Members can request specific information on their royalties, deductions, and outstanding amounts, to be provided within one month.
Whistleblowing: Members can raise concerns about unethical practices to the Governing Board, and if unsatisfied, can escalate to the NCC, which may investigate and issue directives.
The Regulations explicitly state they do not reduce or derogate from any existing member privileges or remedies under their membership agreement or other laws.
IV. Oversight, Reporting, & Financial Integrity
The Regulations establish a rigorous framework for NCC oversight and financial probity.
Obligation to Furnish Information to the Commission (Regulation 12): CMOs must notify the NCC within 30 days of any changes to their foundational documents, Board, tariffs, reciprocal agreements, legal proceedings, holding account debits/credits, and any other relevant information. Certified copies of General Assembly and Governing Board meeting minutes must also be submitted to the NCC.
Regulation 13: Relationship with Other CMOs
CMOs can enter agreements with other local or foreign CMOs.
They must share documentation on their repertoire, managed rights, and territory, as well as their deduction policies, to facilitate inter-CMO cooperation and transparency.
Regulation 14: Relationship with Users
CMOs must provide users with clear information on services, tariffs, and terms.
They must notify users of tariff changes.
Users are obligated to provide CMOs with usage data upon request for accurate royalty distribution.
Regulation 15: Licensing and Tariff Setting
CMOs must establish clear tariffs for licenses.
For non-member right owners who opt out, CMOs must inform licensees within 14 days and terminate existing licenses for those works by the end of the financial year.
Regulation 17: Governance
Mandates two core organs: a General Assembly (members) and a Governing Board (appointed by the Assembly, with balanced representation).
The General Assembly must meet annually and holds significant powers, including approving policies, reports, and appointing key personnel like the external auditor.
Regulation 18: Internal Supervision
The Governing Board oversees the CMO’s management policies.
A key provision limits the Chairman of the Governing Board to a maximum of eight years in office.
The Board appoints the CEO.
Regulation 19: Avoidance of Conflict of Interest
CMOs must have internal guidelines to prevent conflicts of interest.
Board members must disclose conflicts and abstain from related discussions.
Strict prohibitions include: individuals serving on multiple CMO boards, CMOs contracting or paying services to their Board members or close associates, and a CMO member holding the CEO or principal management position
Regulation 20: Split Accounts
A crucial provision mandates that CMOs must maintain separate accounts for royalties, distinct from any other income, ensuring the integrity of royalty funds.
Regulation 21: Holding Account
CMOs must establish a holding account for distributable amounts that cannot be allocated due to inability to contact the right owner, uncertainty of entitlement, disputes, or inadequate data. Funds are held for a minimum of seven years, distributed based on the best available data when due. After seven years, any remaining funds fall into the CMO’s general revenue for distribution (a controversial point in some jurisdictions).
Regulation 22 : Accounts and Audit
CMOs must keep proper accounts. The NCC can appoint an auditor to examine accounts if there’s an allegation of financial impropriety or irregularity. If a breach is found, the NCC can issue a query, and if unsatisfied, issue a directive or sanction.
Regulation 23 : Annual Report to NCC
By July 1st each year, CMOs must submit a general activities report, an annual audited financial report, and a list of opted-out non-members. The audited financial report must be highly detailed, including balance sheets, royalty breakdowns (collected, distributed, unallocated), operating expenses, deductions for social/cultural services, remuneration of management/Board, holding account transactions, and details of transactions with partner CMOs.
Regulation 24: Distribution Policies
CMOs must have member-approved distribution policies outlining calculation basis, distribution manner/frequency, and administrative expense deductions. Distributions must reflect actual usage and be made not later than three months after the financial year-end (unless objectively prevented). Royalties cannot be allocated for purposes other than distribution (after admin deductions) unless expressly authorized by the General Assembly.
Regulation 25: Revenue Deductions
CMOs can deduct administrative expenses, but this shall not exceed 30% of total royalties and income received during the year. The NCC may approve deductions exceeding 30% upon prior written application and a resolution from the General Assembly. Exceeding authorized expenditure limits can lead to sanctions.
CMOs may, by General Assembly decision, allocate up to 10% of their total annual collection for cultural, educational, or social activities benefiting members.
V. Conflict Resolution & Ethical Conduct
Regulation 26 : Complaints and Dispute Resolution
CMOs must provide members and partner CMOs with procedures for handling complaints related to authorization, termination, membership, royalty payments, and deductions. CMOs must respond in writing within 30 days, stating reasons for rejection. Disputes between a CMO and a user or another CMO may be referred to a Dispute Resolution Panel established under Section 90 of the Copyright Act.
Regulation 27: Keeping of Data
CMOs must keep up-to-date records of right owners for identification and location, ensuring protection of privacy and personal data in line with relevant laws.
Regulation 28 : Prohibition of Unethical Practices
This critical section explicitly lists prohibited conducts:
-Negotiating/granting licenses or collecting royalties for works they are not approved to manage.
-Knowingly making false representations.
-Discriminating in license terms among the same class of users without reasonable justification.
-Inducing users negotiating with other CMOs/right owners to stop.
-Failing to provide reasonably required information to other CMOs (repertoire, royalty computation, reciprocal agreements).
-Using information from other CMOs for unauthorized purposes.
-Acting to prevent or hinder another CMO from performing its approved functions.
VI. Sanctions & Transitional Provisions
Fees (Regulation 29): Fees for transactions under these Regulations are stipulated in the Second Schedule.
Notice to Comply (Regulation 30): If a CMO or officer fails to comply, the NCC will issue a written notice detailing the non-compliance, requesting abatement within a specified period, and informing of consequences.
Sanctions (Regulation 31): Non-compliance may attract sanctions including written caution, fine (as per Second Schedule), suspension, or disqualification from holding office in a CMO.
Enforcement of Directives/Sanctions (Regulation 32): Failure to carry out a directive or serve a sanction may lead to suspension pending compliance. An officer cautioned twice or suspended for non-compliance may be disqualified from office.
Existing CMOs (Regulation 33): CMOs approved or whose approval was renewed before these Regulations are deemed licensed and can continue operations for their unexpired approval period. However, subsequent renewal applications must comply with these new Regulations.
Interpretation (Regulation 34): Provides clear definitions for key terms used throughout the Regulations.
Revocation and Transitional Provisions (Regulation 35): The Copyright (Collective Management Organisations) Regulations, 2007, are explicitly revoked. However, acts, approvals, or actions taken under the revoked regulations immediately before the 2025 Regulations came into force are deemed valid as if done under the new Regulations. Existing instruments, orders, etc., made under the 2007 Regulations remain in force.
Citation (Regulation 36): These Regulations may be cited as the “Collective Management Regulations, 2025”.
We look forward to seeing the healthy impact this set of regulations will have in the industry.
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MANAGING PARTNER
TRAINEE ASSOCIATE
INFO@LEXBORGATTORNEYS.COM