Nigeria’s SEC moves to drive market efficiency

The second Capital Market Committee meeting by the Securities and Exchange Commission (SEC) in Nigeria was a pivotal event that highlighted key developments aimed at driving market efficiency and enhancing investor protection. Dr. Okey Umeano, the Chief Economist at the Commission, unpacked the outcomes of the meeting in a recent interview with CNBC Africa. The meeting underscored the SEC’s commitment to cracking down on Ponzi schemes, improving market efficiency, and fostering investor confidence. One of the key messages was the focus on increasing listings, enhancing investor protection measures, and attracting more capital into the market. Additionally, discussions revolved around engaging a younger demographic and introducing new products such as derivatives and mortgages to support infrastructural development in Nigeria. A significant area of focus was the restructuring of rules governing private markets, with plans to release updated regulations soon. The SEC's efforts to bolster the private market aim to attract more capital and create opportunities for smaller companies to raise funds. Another important agenda was the support for the derivatives market to enable hedging and risk management for market players. The SEC emphasized the need to expand the derivatives market and attract foreign investors to deepen market liquidity. One of the critical issues addressed at the meeting was the challenge of unclaimed dividends, an ongoing concern in the Nigerian capital market. The SEC, in collaboration with NIBS, has launched a self-service portal to simplify the process of claiming dividends, aiming to reduce the staggering $215 billion in unclaimed dividends as of March. Looking ahead, the SEC is expected to introduce new rules to support private markets, strengthen the derivatives market, and facilitate financing for infrastructure projects. The focus on creating innovative products tailored to market needs and leveraging technology advancements, particularly in fintech and digital assets, signifies a shift towards a more dynamic and investor-friendly market environment. The SEC's proactive stance on addressing Ponzi schemes and financial fraud through investor education and rigorous enforcement actions underscores its commitment to safeguarding the interests of Nigerian investors. The Commission's zero-tolerance policy towards fraudulent schemes aims to protect investors and maintain market integrity. As Nigeria aims to drive its economy towards the $1 trillion mark, the SEC's initiatives at the Capital Market Committee meeting signal a move towards a more robust, efficient, and investor-driven market. By fostering collaboration among market operators, embracing new technologies, and enhancing regulatory frameworks, the SEC is paving the way for a resilient and vibrant capital market ecosystem in Nigeria.