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SEC receives committee’s report on capital market
The Securities and Exchange Commission, SEC, has received the report of the technical committee set up four months ago to review the capital markets and its processes as well as closing of regulatory loopholes currently existing in the sector.
It would be recalled that in the last quarter of last year, the Chairman of the Board of the Commission, Senator Udoma Udo Udoma inaugurated the Committee to review the capital market structure and processes with the aim to improve it for efficiency, transparency and to reposition it for international competitiveness.
This came at a time when issues of insider trading and price manipulations were said to exist in the capital market.
The committee however, was given five specific mandates among which was to review the current market structure and processes as well as the regulatory institutional framework and make recommendations for ways to improve the operational efficiency and transparency of the market, including any suggested amendments to existing laws.
At the presentation of the report in Abuja, the Director General of the Commission, Mallam, Musa, Al-Faki assured that SEC is resolute in the implementation of the report in the overall interest of the nation.
Al- Faki noted that the work of the committee could not have come at a better time giving the current financial market challenges.
“With the leading role this market is expected to play in mobilizing funds required for infrastructure funding, extra efforts are no doubt required to not only restore investors’ confidence but to also raise it higher”, he said.
While presenting the report to the Commission, the Chairman of the Technical Committee, Mr Adedotun Sulaiman, noted that the review was developmental and long term in nature.
According to him, the impression that the report will immediately that solve the current state of the market or come up with solutions to today’s challenges is not the mandate of the review.
He noted that though the committee was not unmindful of the current challenges facing the capital market, it spent time to consider ideas that would address the current market situation which he said has since been presented to the relevant authorities.
The committee’s recommendations which covers seven areas is said to ensure the market repositioning for better performance when there are implemented.
The seven areas are: to enhance the international competitiveness of the Nigerian capital market, to increase its depth, breadth sophistication, to enhance its efficiency and cost competitiveness.
Others are: to strengthen regulatory oversight of the market, improve standards of disclosure, transparency and accountability, strengthen the participating institutions in the market as well as improve coordination between fiscal and monetary regulatory authorities I the wider financial system.
According to the report, there is need for the Nigerian Capital Market to be innovative and attractive to investors both locally and internationally. Also, the market has to be open and fair and its operations should be transparent and efficient, while the cost of doing business should have less bureaucracy.
While giving the recommendation, Sulaiman observed that the real benefits can only come with faithful and effective implementation, adding “Implementation of our recommendation will not be easy but we believe a concerted effort by all stakeholders will be essential to create a capital market of our vision”.
He further said “we are living through a particularly difficult time for the global financial system, markets have dropped to record low, many financial institutions have gone bankrupt and many have relied on massive bailout from their respective government to stay a lot.
“Therefore there is need for tighter regulatory oversight in the coming months as fallout of the on going crisis many will definitely blame in part on regulatory and supervisory inadequacies.
This may be challenging times, but they also present us with a unique opportunity to take a critical look at our capital market, so that we begin to implement the reforms that will build the capital market of our future. These reforms will include modernizing the system and regulations to effectively regulate new and more sophisticated instruments, improving capital adequacy standards of market participants and closing the regulatory loopholes we are now in.”, he informed.
While he charged SEC on the implementation of the report, Sulaiman noted that in the face of the economic situation, Nigeria has the opportunity to learn from others’ mistakes to emulate and adopt the best regulatory and operational practices. “By embracing such change for the better, Nigeria can become part of and benefit from the global drive to restore investors’ confidence in the capital market”.
The Chairman of SEC Board, Senator Udoma Udo Udoma while receiving the committees report, said that SEC is concerned about the current short term challenges of the capital market and will continue to work with other regulators to bring back confidence to the market.
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