SEC rolls out revitalisation plan for capital market

Munir Gwarzo, Director General of Securities and Exchange Commission (SEC) on Wednesday assured investors of the Exchange’s resolve to deepen the market through the implementation of the 10 year Master Plan which was adopted in 2014.

Gwarzo disclosed this during an interactive session with the House Committee on Capital Market and other Institutions chaired by Tajudeen Yusuf.

He explained that the 10- year Master Plan was formulated based on the Malaysian success story which rose by over 300 percent in terms of new companies and new products introduced into the capital market.

He said “we have also been vigorously pursuing our capital market mandate which is investors protection and capital market development. So even within that limited resources we have been able to do that. I am sure most of you followed our initiative from last year to this year with respect to electronic dividends, de-materialisation.

“We also set up the national investment protection fund and we have paid 3,000 beneficiaries. We launched the corporate governance scorecard, we have set up committees to review all the laws in Nigeria and all these cost money, Gwarzo said.

While clarifying issues on the N4.5 billion spent on staff emolument, the SEC helmsman explained that the Commission has judiciously utilise its meagre resources, despite various challenges facing the country.

“We see SEC as a more stronger institutions, yes we are going through a strong situation because the market is not where we want it to be. It is a reflection of the economy.

“Unfortunately SEC relies on what the market is able to make. In other jurisdictions, it is not so. In US SEC prepares its budget, takes it to the US Congress for approval. In south Africa, it is the same thing. Once FSB prepares its budget and it is approved, the market would have to fund it. It is only in Nigeria let’s say if the budget is N10, and the market gives us N3, we have to find a way to utilise that N3.

“When we came on board we say infractions would not be emphasised there should be zero tolerance. So, some of the penalties we also drive from certain infractions are also not there and that is good for us because ours is not about collecting penalties but to ensure the market is well governed based on the rules and regulations.”

On the efforts made so far to enhance service delivery, Gwarzo disclosed that the Commission has recruited specialists to fill key offices including Risk Management Division; Strategy Division, Research and Economic division, among others.

“We went round the universities to look for someone who specialize in micro econometrics. You could have a PhD in economics specialising in agriculture economics or development economics but because we wanted someone who can be churning data from the market, someone who can do quantitative analysis , we emphasised on econometrics and we had to visit universities Lagos, Ibadan, Ife and when we went there we said we were looking for that and we had eleven people that went through the process. The assertion that we just got someone is certainly not so. We went through the process and one person became successful.

“And then the risk management also. As an SEC, it is very important for us to fortify our risk management division because we superintend over 1,000 operators and each one of them have different risk profile. You are dealing with a broker, with a register, an issuing house, you are dealing with a trustee. So you needed a robust risk management outfit. We were lucky we got someone who had been in risk management for about 10, 15 years apart from being a chartered accountant and he is also a qualified CSA which is one of the most difficult and prestigious financial courses in this world. We also went and got him.

“The federal character commission also praised SEC because when they looked at our nominal roll, they discovered there was no state in Nigeria including FCT that does not have a staff in SEC. So I think we have done a good job,” he said.

Speaking earlier, Tajudeen Yusuf, chairman, House Committee on Capital Market and other Institutions who presided over the session, underscored the importance of capital market on the nation’s socio-economic development.

He also emphaised on the need to adhere to international best practices in the bid to make Nigerian capital market a preferred place for local and foreign investors.

Yusuf who attested the potential of the capital market, frowned at the manner in which Federal and State Governments share revenue accrued from crude oil on monthly basis.