As a vital element of the economic system, the capital market has an important function to play in its growth. And that is what the Director Basic of the Securities and Trade Fee (SEC) is presently doing to make the capital market the motive force of Nigeria’s economic system; BENJAMIN UMUTEME writes.
On July sixth 2020, when Lamido Yuguda assumed workplace because the Director Basic of the Safety and Trade Fee (SEC), analysts noticed it as one other alternative to take the Fee to the following stage contemplating the work, its former head; Mary Uduk did throughout her tenure as appearing Director Basic.
The Nigerian capital market with its nice potential for progress has nevertheless, not been performing to its potentials.
In the meantime, coming at a time when the whole world was in lock down from the dreaded Covid-19 pandemic, it was apparent that the SEC DG had his work lower out for him.
In his deal with at his unveiling, Yuguda famous that with its potential for growth and progress, the sky was the start line for the Fee and Nigeria each within the interim and put up pandemic interval.
“Most of the plan’s initiatives have been efficiently applied whereas many others are work in progress according to its aims,” he mentioned.
“Due to this fact, the continued implementation of the plan will likely be one of many main focus of the incoming administration, whereas we additionally search attainable methods of strengthening it for enhanced affect.
“We’d equally work in direction of improved market regulation, surveillance and basic growth.
“Collectively we should set our sights on reaching these milestones which might be able to making the capital market a robust engine of progress for the Nigerian economic system.”
Capital Market Grasp Plan as reform pivot
Decided to place the capital market as the motive force of the economic system, the SEC Director Basic promptly went to work on the Capital Market Grasp Plan (2015-2025). The target of the Grasp Plan is to map out methods for the advance of the Nigerian capital market in key areas resembling investor safety and schooling, professionalism, and product innovation, and for the growth of the capital market’s function within the economic system.
The SEC DG, not desirous to jettison the plans set out together with his administration group efficiently reviewed the CCMP to realign the initiatives/deliverables to prevailing market situations and maintain the doc related within the dynamic capital market on account of points associated to Fintech, sustainability and regional integration.
Over time, there have been legacy points round unclaimed dividends. It’s a identified undeniable fact that Id Administration is a vital driver in enhancing market participation and fixing unclaimed dividends and associated issues.
To place a relaxation to the matter, the administration additionally inaugurated a market-wide Id Administration Committee with a mandate to harmonize the assorted databases of buyers within the Nigerian capital market, facilitate knowledge accuracy available in the market, mitigate fraud, enhance KYC necessities and handle AML/CFT dangers, amongst others. The report of the committee is anticipated to resolve points which have hindered the expansion of the market, hampered investor confidence, and issues that function obstacles to entry for potential buyers, amongst different advantages.
On major market actions, the Yuguda-led government administration of the SEC has additionally prior to now two years authorized 41 new equities points valued at N656.9 billion, 37 bonds valued at N776.2 billion, 28 purposes for shelf programmes valued at N2.5 trillion and 21 Trade Traded Derivatives Contracts. That is even because it processed 6 Schemes of Merger, 7 Acquisitions, 21 Company Restructurings, and three Takeovers through the interval. It additionally ensured that over N11 billion of untraceable shareholders’ funds from Schemes of Association within the custody of Registrars have been transferred to the Nationwide Investor Safety Fund (NIPF).
As a part of the method of enhancing time to market of transactions and quick monitoring the overview course of, the Fee carried out coaching for issuing homes to assist enhance the standard of purposes submitted.
Equally, the Fee additionally recorded a landmark achievement on the primary digital providing with a mixed characteristic of guide constructing to Certified Establishments and use of the value found from the book-build for gross sales to Retail Traders. It additionally granted approval for the primary 21 derivatives contracts which had 7 and 14 totally different contracts from each the NGX and FMDQ Exchanges respectively prior to now two years.
On Collective Funding Scheme (CIS), the Yuguda-led administration has additionally, following the completion of collection of monitoring and analysis processes, commenced implementation of 100 per cent custody requirement within the CIS sector to guard buyers. In consequence, all shoppers’ property at present managed below discretionary and non-discretionary mandates are to be held below impartial custodial agreements in custodial banks.
The Fee has additionally recorded exceptional milestones in its secondary market actions prior to now years with the profitable demutualization of the Nigerian Trade Restricted (NGX) which funding analysts see as a milestone within the growth of the Nigerian capital market.
Analysis has revealed that company governance points are on the coronary heart of why companies fail. And with a view to completely lay the problems to relaxation, SEC below the management of Yuguda launched tips on the Implementation of Sections 60-63 of the Investments and Securities Act (ISA), 2007 and with a view to strengthen the disclosure regime in capital market, the Fee in a round dated January 19, 2022 supplied public corporations a quick monitor possibility for submitting Audited Monetary Statements.
As well as, the Fee additionally developed the SEC Company Governance Pointers (SCGG) to handle company governance points not thought of within the NCCG, and launched similar in October 2020. As a part of its efforts to harmonise the reporting timeline of the SEC Company Governance Guideline (SCGG) with that of the Nationwide Code of Company Governance (NCCG), it additionally in yr 2021 uncovered to the general public for feedback an modification to Guidelines 42(2).
The Fee has additionally as a part of its regulatory interventions to amicably resolve disputes between the board and shareholders of listed corporations resolved the disputes between Alhaji Muneer Alade Bankole (the Chief Government Officer) and Sheikh Abdulmohsen A. Al-Thunayan (Chairman of the Board) of Medview Airways, resolved these between main shareholders of Ikeja Resorts Plc and returned the corporate to profitability and likewise reached a settlement with Oando Plc in 2021 after concluding investigation of Company Governance allegations leveled towards the corporate.
In an effort to construct its capability to control the fledging FinTech house, the Fee’s administration collaborated with the College of Cambridge’s Centre for Different Finance, UK for the coaching of choose staff on an authorized course on Fintech & Regulatory Innovation, to boost the Fee’s capability in regulating Fintech. Additionally, it collaborated with the World Financial institution to fee a Fintech Scoping venture and held collaborative engagements with 15 Worldwide and native Fintech stakeholders to information the Fee on its Fintech insurance policies. The Regulatory Incubation Pointers to operationalize provisional regulation for aspiring Fintech companies have been launched inside the interval.
In furtherance of its market regulation roles, the administration of the Fee was capable of confirm the quantum of unclaimed dividends of publicly traded corporations that fall inside the classes eligible to be borrowed by the Federal Authorities. This amounted to N56,584,795,648.71 and $8,153,118.41 respectively. As well as, it additionally facilitated the switch into the SEC/CNB NIPF Account of N2.3 billion in extra of return monies and N11.4 billion in Schemes consideration cash, each of which had beforehand been held within the custody of the Registrars.
Cash laundering/ terrorism financing
On the controversial problem of Anti-Cash Laundering/Combating the Financing Of Terrorism (AML/CFT), following the GIABA Mutual Analysis of Nigeria, the Yuguda-led government administration made concerted efforts within the capital market to fulfill each the GIABA Mutual Analysis Report(MER) Observe-Up Course of and the FATF Worldwide Cooperation Evaluate Group (ICRG) necessities with a view to keep away from Nigeria being positioned on the FATF public gray record on the Plenary when the grace interval expires in October, 2022.
For instance, on account of the MER findings that Nigeria had a number of essential deficiencies in its AML/CFT/CPF system in relation to Technical Compliance, and that its effectiveness controls have been inadequate to mitigate its excessive ML/TF/PF dangers, the Fee championed the amendments of Guidelines and Laws of the Digital Asset Service suppliers; the sector particular rules to repeal the 2013 SEC AML/CFT Laws and enactment of the 2022 AML/CFT Laws; the SEC AML/CFT RBS Framework.
These new guidelines and amendments have been achieved with a view to deal with Nigeria’s MER deficiencies and broaden the scope of preventive measures obtainable to VASPs.
In furtherance of its regulatory mandate, the Fee carried out investigations into complaints by buyers and out of the 250 complaints introduced ahead into the interval, 182 have been resolved. Additionally, out of the 58 complaints in relation to Ponzi schemes acquired, 45 have been resolved. The Fee was capable of get better 10,659,168 models of varied corporations’ shares in addition to the sum of N1,384,255,526.73 recovered for buyers through the interval below overview.
Through the interval, the Fee additionally sealed up the premises of 4 unlawful operators and initiated the prosecution of their promoters simply as 7 corporations are at present dealing with felony prosecution.
The Fee has additionally remained relentless in growth of acceptable regulatory framework to information operations and actions within the capital market. As an illustration, it issued New Guidelines on Robo-Advisory Providers to information the regulatory necessities and expectations for offering automated advisory providers available in the market and launched the Guidelines on Commerce Repositories through the interval below overview.
The great work Yuguda is doing on the SEC has not gone unnoticed, thus incomes him the management of the West African Securities Regulators Affiliation (WASRA). Underneath his management, guidelines for the built-in West African Capital Market have been developed and reviewed.
Equally, the Fee participated in two conferences of the Africa/Center East Regional Committee of IOSCO (AMERC). The AMERC is considered one of 4 regional committees constituted by IOSCO to deal with regional points regarding securities regulation within the Africa/Center-East area.
The Fee’s Director Basic is a member of the IOSCO Board, representing the Africa/Center East Regional Committee of IOSCO (AMERC) on the Board. Within the years below overview, the Fee participated in 5 Board conferences held nearly and contributed successfully in arriving on the varied selections made on the board.
As Yuguda continues to soldier on despite the put up Covid-19 challenges each globally and on the house entrance, financial watchers say, Nigeria’s capital market could be higher positioned to compete with its friends globally.