SEC, Kano host interface on interest-free capital market instruments

In their bid to strengthen the development of interest-free capital market instruments in the state, the Securities and Exchange Commission (SEC), and the Kano State government have concluded plans to stage a day interface with stakeholders in the Nigerian economy.

The roundtable programme, which takes place today, in the commercial city of Kano, is a follow up to similar event held last week in Abuja, for players in the banking and financial market.

Facts obtained by BusinessDay weekend indicated that the interface was a part of the concerted efforts being made particularly by the SEC, and the new administration in Kano State to deepen participation of stakeholders in the state, in capital market activities.

The roundtable will be focusing on how to develop Islamic Market instruments as a viable alternative means of funding development in both private and public sectors, at all levels of the Nigerian society.

An interest-free capital market instruments such as ‘Sukuk’ (Islamic bond) is an alternative capital source of funding, conceived in line with Islamic principles and practices.

The move to deepen interest free financing instruments, such as Sukuk, which is already a tradable instrument on the floor of the Nigerian Stock Exchange, may not be unconnected with the ongoing quest to boost activities on the Exchange.

Naif Abdussalam, divisional head, corporate commission, SEC, Kano zonal office, while confirming the programme, said the event would be attended by international experts on Islamic banking and finance from South Africa, among others.

He said interest-free instruments, which are Shari`ah compliant, just as the conventional ones, tradable on the market could be used as investment tools as well as obtained as instruments for financing productive activities by both private and public players in the economy.

According to him, a keynote address at the event will be delivered by Mounir Gwarzo, director-general, SEC, who is also the chief host of the event.

Giving an insight into the nature of Islamic market operations, an industry expert, Musa Aliyu, said: “The Shari`ah principles that guide Islamic market operations are not different from those that guide the Islamic Financial System as a whole. There may, however, be differences on emphasis on some principles as they affect one sector more than the other.

“In this respect, issues of ‘gharar’ and ‘maysir’ may be more related to Islamic capital markets. The laws, rules, and Shari`ah interpretations regarding economic activities takes into consideration issues of social justice, equitability, and fairness as well as practicality of financial transactions.

“One of the guiding Shari`ah legal maxims in relation to commercial transactions and contracts was that ‘all transactions are permissible unless there is a clear prohibition’.”