Nigeria

Market Operators Set Agenda For New SEC DG

As the new director-general of the Securities and Exchange Commission, Mr Lamido Yuguda, settles down to work, industry operators have been speaking on areas he should prioritise for an effective regulation of the nation’s capital market. MARK ITSIBOR writes

It was Peter Bernstein, a notable investment analyst that aptly posited that the “fundamental law of investing is the uncertainty of the future.” The interest of every investor all over the world is to be able to forecast elements of the future.

As Mr Lamido Yuguda takes over as the new director general of the Securities and Exchange Commission (SEC), many, especially local and foreign investors expect him to deliver a capital market that would not only help government to raise funds, but improve the regulation and development of the market, while ensuring investors’ confidence.

For some market analysts, Yuguda already has his job well cut out for him. Basically, they say he needs simply pick up the document, revise and update the Commission’s Capital Market Master Plan and then hit the ground running with the outstanding initiatives in the Master Plan to ensure greater development of the market.

Since the days of Arunma Oteh as DG through Mounir Gwarzo, there has been a major agenda which is the implementation of the Capital Market Master Plan. Many market operators say the new DG should implement to the later the master plan to achieve greater results.

His starting point, Professor of Finance and capital markets at the Nasarawa State University, Uche Uwaleke said, is for the new DG to carry out an assessment of the implementation of the capital market master plan to determine outstanding issues with a view to revising and updating the roadmap.

“The SEC management should ensure that the revised blueprint for capital market development is integrated into the federal governments 2nd Economic Recovery and Growth Plan (ERGP) (2021 – 2025),” he said.

The current ERGP paid little or no attention directly to issues pertaining to capital market. Mainstreaming the revised capital market Plan into the new ERGP, the former commissioner for Finance Imo State thinks will ensure that the growth of the capital market becomes a key policy issue going forward including through the provision of fiscal incentives.

On the flip side, a major challenge facing the capital market is the low level of retail investors’ participation which industry experts say is not unconnected with low capital market literacy in the country. The expectation is that the new SEC management work closely with all the relevant stakeholders especially the association of capital market academics of Nigeria to take capital market education to the nation’s educational institutions.

“The issue of investors’ confidence is equally paramount,” Uwaleke said. Some industry watchers say investors’ confidence has improved in recent times owing to the efforts of the Commission in enforcing discipline in the market. Those who spoke to our correspondent expect the new management team to sustain the tempo and minimise to the barest minimum cases of abuse and infractions.

Beyond that, many say it is equally important the new DG carries the board along by working closely with the chairman, Olufemi Lijadu, to improve the welfare of the Commission’s staff as well as advance the interest of the capital market.

In his inaugural remarks, the new SEC boss promised that his administration will concentrate more on effective implementation of the Commission’s Capital Market Master Plan to enhance greater development of the market.

He said his administration would equally work towards improving market regulation, surveillance and general development.

Yuguda understands that in order to do this effectively, SEC (under his watch) will need to develop relevant capacities and foster collaboration in achieving its mandates.

As he rightly said while taking over the mantle of leadership, “Many of the plan’s initiatives have been successfully implemented while many others are work in progress in line with its objectives.”

He assured that the new management will work to the best of its ability to uphold things on ground and consciously seek ways to improve them to the benefit of all stakeholders.

“Therefore, the continued implementation of the plan will be one of the major focus of the incoming management, while we also seek possible ways of strengthening it for enhanced impact,” he remarked.

The SEC DG said the capital market is a crucial component of any economy. Noting that SEC has over the last two decades worked with other relevant stakeholders to introduce and implement various initiatives targeted at improving the regulation and development of the market.

According to him, the capital market master plan launched in 2014 has the objective of positioning the capital market for an accelerated development of the national economy.

In the last two years, the Commission has continued to implement the Capital Market Master Plan initiatives alongside other key reforms.  Some of the initiatives of the regulating agency include implementation of the Roadmap for a vibrant Commodities Trading Ecosystem in Nigeria to facilitate the development of the agricultural sector and the diversification of the Nigerian economy; introduction of Rules on Green Bonds to promote issuance of debt instruments for financing of environmentally friendly projects and to provide the regulatory framework necessary for sustainability finance in Nigeria.

Apart from that, SEC also participated (as the first regulator) in the flagship Pan African Programme promoted by Financial Sector Deepening Africa (FSD Africa) to strengthen the institutional capacity of the Commission in critical areas, provide world-class technical assistance and conduct research to support the development of new policies and regulations; introduced the Checklist Deemed Approval Regime for debt issuances to fast track the Commission’s fixed income application review process and reduce time-to-market for issuers and developed implementation of the Roadmap for FinTech in the Nigerian Capital Market.

On its brag list also is the development of the Crowdfunding Regulatory Framework, which following its eventual release. It has the potential of transforming medium and small scale business financing in Nigeria; introduction of rules to govern Electronic Initial Public Offers (e-IPOs); development of rules to regulate Derivatives trading and activities of Central Counter Parties (CCPs). These rules will facilitate the development of innovative products that will deepen the market, enhance liquidity and provide hedging opportunities to manage risks in the market and review of major rules in relation to Collective Investment Schemes to benchmark the regulatory regime in Nigeria against global best practices.

Continued implementation of initiatives such as the Electronic Dividend Mandate System (E-DMMS) and extension of the forbearance window for regularisation of multiple subscriptions to public offers between 2000-2010 to forestall the re-occurrences of unclaimed dividends in the capital market and representation on IOSCO Board following the Commission’s victory at the AMERC elections is also part of its achievements in the last two years.

He resumed alongside three other executive commissioners namely: Mr Reginald Karawusa, Mr Ibrahim Boyi and Mr Dayo Obisan.

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