Mounir Gwarzo, the director-general of Nigeria and Securities & Exchange Commission (SEC) has said that the various innovations thus far introduced by the apex capital market regulator has resulted in visible benefits for stakeholders, and positive developments for the market.
Gwarzo told journalists at the Lagos office of the Commission that one of the landmark initiatives of SEC is the e-dividend registration by investors, noting that this made the process of dividend payment efficient.
“We have also introduced the capital market master plan and the capital literacy master plan to ensure the development of the Nigerian capital market,” Gwarzo said. “The change in rulemaking that we have also introduced will allow stakeholders not just to know the rules, but also to understand why the rules were made.”
READ ALSO: Nigerian capital market: Pandemic, performance and palliative
He said that SEC is championing the introduction of capital market studies in Nigerian schools as it intensifies its enlightenment campaign efforts to educate the public on how the capital market operates.
According to Gwarzo, the financial literacy committee of the Commission has been charged with the responsibility of ensuring that many Nigerians gain, in the minimum, basic knowledge of investment and operations of the market.
“We aim to upscale the participation of retail investors in the Nigerian capital market,” he said.
Lack of innovation has been blamed for the shallow and narrow nature of the Nigerian capital market as largely plain vanilla debt and equity products are traded by very few investors.
Analysts say that products such as derivatives, which are the most actively traded financial instruments, ensure the efficiency and depth of capital markets. They added that the establishment of a financial derivatives market improves the capital structure and profit-making ability of market participants.
According to the analysts, while derivatives can play a role in strengthening the effect of monetary policy and absorb foreign capital into a country by bringing stability to the financial markets, hedgers can use them to manage their risks.
READ ALSO: Crypto investments: Nigeria’s SEC identifies what will be regulated, who will be regulated
Gwarzo said the Commission is working with all stakeholders to ensure that many products are introduced into the Nigerian capital market to make it reflect the realities of a modern capital market with its many benefits.
“The commodities exchange, for instance, is on course to become active soon,” Gwarzo said. “This will provide a structure for farmers to export their commodities as it will promote standardisation and quality assurance. The implementation plan will be out soon.”
He added that Nigeria needs a lot of investment in infrastructure and that the bulk of this investment will come from the capital market. That is why SEC is intensifying efforts to introduce products that can attract these funds, he added.
Gwarzo said that SEC has introduced the e-dividend registration clinic to help investors recover any dividends they may have missed due to the previous inefficient system. According to Gwarzo, with e-dividend registration, investors are assured of prompt receipt of dividends from their investments whenever they are declared.
Gwarzo called on investors to take advantage of the free e-dividend registration window that ends on December 30 2017, as investors will be required to pay N150 after that date to be enrolled for e-dividend payment.
An e-dividend mandate statistics obtained by BusinessDay from SEC shows that the number of registrants for electronic payment of the dividend from inception to July 2017 was 2.1 million; 296,267 of these registered between January and October 2017.
READ ALSO: Ex-SEC DG Gwarzo, other arraigned, granted bail over alleged N12.8m contract scam
There was a steady increase in the number of registrants from 8,872 as at January 2017 to 41,703 as at June 2017. However, the number of registrants fell to 33,392 in July, rising to 50,819 and 59,204 in August and September 2017. The number dropped to 37,153 by October 2017.
Gwarzo expressed satisfaction with the milestone achieved by the market this year, especially with the spate of listings that occurred on the FMDQ OTC Securities Exchange.
“The market has done well, the indices are still positive, and we are working to ensure that all capital market operators join to develop the market,” he said. “We expect the stockbrokers to play a bigger role in the market when we are done.
Bashir Ibrahim Hassan
