SEC set to remove unnecessary requirements for efficient capital market

The Securities and Exchange Commission (SEC) has promised to review some of the capital market rules to make them more flexible and appealing to investors.

Mr Lamido Yuguda, the agency’s Director-General, admitted recently in Lagos at the CEO Roundtable organized by the Nigerian Exchange (NGX) Limited that some requirements prevent companies from listing their shares for public trading, promising to collaborate with other regulatory organizations in the ecosystem to improve them.

He stated that the SEC was pleased to engage with other regulators and issuers to hear directly from them and that in 2021, the commission partnered with the Nigeria Employers Consultative Association (NECA) to launch the Securities Issuers Forum (SIF) to provide an avenue for issuers to engage directly with regulators on pertinent regulatory issues.

According to him, the forum’s objectives include maintaining regular contact with the regulator, promoting sound corporate governance and ethical conduct, advising the regulator on regulations affecting companies and issuers, promoting healthy competition, and maintaining an enabling business environment by monitoring issues of direct relevance to members.

“Let me reiterate that the SEC is continually focused on increasing the visibility and attractiveness of our market and will continue to focus on building and sustaining a fair, transparent and efficient capital market.

“The commission will also continue to embrace the ease-of-doing-business principle by simplifying its processes and enhancing time-to-market through the elimination of superfluous requirements that lead to inordinate delays in capital raising and other capital market operations.

“This is particularly important so that the market be deepened further and provide an avenue for hitherto inadmissible entities to be eligible for listing,” Mr Yuguda stated.

The SEC DG further said efforts are being made to ensure the repeal of the Investments and Securities Act (ISA) 2007 and the passage of a new Investments and Securities Bill into law.

He explained that this is to align the law with current realities and global trends in capital market regulation, including growing changes in market practices, processes and products.

“We have consistently focussed on the creation of an ecosystem in which governments, entrepreneurs and other issuers can efficiently access capital. Stakeholders must however look further to introduce more products, leveraging on the emerging trend of financial technology,” he added.

Mr Yuguda stated that the theme of the event, Creating the enabling ecosystem for accessing capital from the Nigerian capital markets, resonates with the mandate of the agency of developing and regulating the market while protecting investors.

He said the demutualisation of the Nigerian Stock Exchange (NSE), which led to the emergence of the current NGX Group, has brought with it a renewed focus on expanding the market by consolidating the successes achieved through the traditional methods of capital raising while working with important stakeholders to introduce new sources of financing.

“The commission welcomes the sound initiatives of NGX for continued engagement with experts to share their perspectives on changes that would lead to the much-desired expansion of the market.

“This effort would not have come at a better time than now when economies are just beginning to face the devastating economic reality of the Ukraine and Russia crisis, which reared its head just as nations were still grappling with the health and economic challenges posed by the Coronavirus pandemic.

“You may be aware that the commission is in the implementation phase of a comprehensive market and institutional reform programme, the Capital Market Master Plan, that is intended to reposition the Nigerian capital market to be globally competitive.

“The commission has successfully completed a comprehensive review of the master plan. The reviewed plan is expected to guide further development of the capital market to attract more funds for economic growth and development,” he informed the participants.