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Securities and Exchange Commission
... nurturing Africa’s preferred capital market
The Securities and Exchange Commission (SEC) is the apex regulatory authority of the Nigerian capital market charged with the dual responsibilities of regulating and developing the market. The Commission is one of the major institutions that has keyed into the Federal Government’s Financial System Strategy (FSS) 2020, aimed at transforming Nigeria into an international centre and Africa’s financial hub.
Standardization of Practice
In line with international best practice and standards, SEC has an Advisory Industry wide Committee on Auditing and Financial Reporting, charged with providing leadership on new auditing and reporting standards and considering case of non-compliance by quoted companies. This is in accordance with International Auditing and Assurance Standard Board (IAASB). As part of the consolidation efforts within the capital market, SEC has prescribed a new capital base for capital market operators. This is designed to enhance operators’ efficiency and competitiveness. In addition, it is positioning players in the capital market to have access to more capital in order to reap the benefits accruable from financial market globalization. In its determined effort to ensure that the domestic capital market is made competitive to attract both local and foreign investment, the Commission has reduced the capital market fees for both primary and secondary market’s transactions.
Progressive Report
The Nigeria capital market has witnessed tremendous growth in recent years. For instance, the all-share index has risen steadily from 5,672.7 points in 1998 to close at a meteoric highest point of 51,330.46 as at the end of October 2007. The total market capitalization equally increased considerably from N262.5 billion in 1998 to N8.04 trillion as at October 2007.
The admission of SEC Nigeria into Appendix “A” signatory to the Multilateral Memorandum of Understanding (MMoU) of the International Organisation of Securities commissions (IOSCO) in 2006 in Hong Kong is a testimony to the Commission’s compliance with international standards.
The Commission has also signed bilateral MoU with several jurisdictions, including South Africa, Ghana, China, Uganda, Tanzania among others. The Commission is also set to launch a Code of Conduct for Shareholders’ Association. This is intended to strengthen them, while enhancing shareholders value and good corporate governance of public companies.
New Products
The SEC Nigeria, in line with the increasing demands of clients, has launched new products to cater for specific needs of the individuals and corporate organizations. The Mortgage Backed Securities (MBSs) and Real Estate Investments Trusts (REITs) are the latest in the market, aimed at providing affordable mortgage finance to clients.
The Commission is making several efforts to make the Nigerian market a preferred investment market for all investors. For instance, the Commission is encouraging investors to embrace e-dividend to tackle the unclaimed dividend problem.
In partnership with Debt Management Office (DMO) and the International Finance Corporation (IFC), the Commission has played active roles in promoting the development of the Bond market in Nigeria. This has further deepened the market and enhanced the economic growth of the country.
The Prospects / Challenges
The SEC Nigeria has recorded solid achievements, especially with the country’s stable democratic governance and the reforms in the financial sector. Investor confidence and awareness has increased with the upsurge in capital market activities.
The quality of service delivery has also been enhanced. A lot of progress has been made with respect to the automation of its processes through electronic filing, e-trading, remote trading, e-bonus, e-dividends and electronic issuance of securities among others. To ensure that the Nigerian capital market performs satisfactorily under the imperative of globalisation, liberalisation, innovation and deregulation, the challenge before SEC is to establish internationally competitive market structures in areas of payment, trading, clearing and settlement systems, listing requirements and minimum infrastructural standards. In line with the FSS 2020, SEC’s vision is to transform Nigeria into a leading international capital market centre and preferred investment destination in Africa.
Head Office: SEC Complex, Plot 272 & 273, Samuel Adesujo Ademulegun Street, Central Business District, PMB315, Garki, Abuja
