SEC moves to raise voting powers of retail investors

Securities and Exchange Commission (SEC) will soon announce some fresh rules that should guide the conduct of Annual General Meetings (AGMs), and in a sense give louder voice and voting powers to retail shareholders for a robust Nigerian capital market

Disclosing this in Abuja on Monday, Mounir Gwarzo, director-general, SEC, said the coming guidelines would ensure that shareholders, particularly the retail investors, were given adequate representation in terms of participation during AGMs, going forward.

Gwarzo was spoke at the inauguration of a Study Team on “Voice and Voting Power: What role for the retail shareholders in the Nigerian capital market?”

The group’s core goal is to voice and voting power of the retail shareholders for a robust Nigerian capital market, and has six months to present its recommendation.

Gwarzo said apart from the review of the conduct of AGMs, the commission would also be reviewing the Companies and Allied Matters Act.

“This study is not only good but timely because before the end of this week, SEC will set up a team that will review the Companies and Allied Matters Act.

“As at today, we have started working on rules that will guide the conduct of AGMs and so the timing is right and we need to move very fast, because I believe that some of your recommendations will be part of these laws that are being reviewed,” he said.

Kemi Adeosun, minister of finance, in a keynote address at the inauguration, asked the study group to also work towards ensuring that the minority shareholders and retrial investors who fled the market following the market declines of 2008 come back to the market and help boost it.

Adeosun was of the opinion that the National Investor Protection Fund set up by SEC should assist towards boosting confidence of such investors to not only return to the market but also become more active in the affairs of their companies.

Adeosun, who was represented by Mahmoud Dutse, permanent secretary, Federal Ministry of Finance, further urged the study group to ensure balance in the power equation between the majority and the minority shareholders in the interest of their companies and the economy.

Welcoming the audience, Shamsudeen Usman, a former minister of national planning, said the need to protect retail investors as well as ensure their quick return to the capital market following huge losses they incurred in 2008, informed the decision to carry out the study.

His words: “The shareholders have a voice and voting power but they have not been using that voice and voting power for the purpose for which they were created.

“The code of conduct that was drawn up is not being followed because the shareholders unions are not being democratised.

“Over the last few years, the market has been really down and there is need to address some of the issues that are contributing the the decline in the stock market.”