SEC says to set National Savings Strategy implementation committee

The Nigerian Capital Market Committee (CMC) held its first quarter (Q1) meeting on Thursday April 12, 2023.

Speaking to journalists at the end of the meeting, Lamido A. Yuguda, Director General, Securities and Exchange Commission (SEC) noted that the Commission would commence sensitisation and stakeholder engagement on the implementation of the National Savings Strategy (NSS). “An Implementation Committee would be established to ensure success of this initiative,” he added.

The CMC meeting was attended by over 280 participants comprising the Executive Management and senior staff of the Commission, Capital Market Operators
(CMOs), and representatives of relevant government agencies like the Central Bank of Nigeria (CBN), Debt Management Office (DMO), Federal Inland Revenue Serviced (FIRS), Investments and Securities Tribunal (IST), National Insurance Commission (NAICOM), and Financial System Strategy 2020 (FSS2020).

“The meeting was officially informed about the passage of the Investments and Securities Bill (ISB) 2023 by the Senate. Some of the provisions in the ISB include stiffer punishment for operators of Ponzi schemes, expansion of the categories of issuers of securities, and better coverage of some new products among others. The ISB also has provisions for regulation of commodities exchanges and other operators in the commodities trading ecosystem.
“This is a significant development for the Nigerian capital market. The Bill is expected to be presented to President Muhammadu Buhari for his assent,” Lamido said.

He said the Supreme Court’s recent affirmation of the Investments and Securities Tribunal’s (ISTs) jurisdiction over capital market disputes was also highlighted at the meeting. “This landmark decision confers exclusive jurisdiction on the IST to determine all issues listed in Section 284 of the Investment and Securities Act (ISA) 2007”.

Members of the CMC were also informed about the new Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations and guidelines that mandate capital market operators to comply with stringent reporting obligations. The SEC said it will continue to apply zero tolerance to money laundering, terrorism and proliferation of weapons financing obligations.

“The Chairman reported that the annual renewal of registration of CMOs was conducted between January 1 and 31, 2023. At the end of the exercise, 627 CMOs representing over half of the total number of CMOs on the Customer Relationship Management (CRM) portal renewed their registration status. The Commission is carefully reviewing the report, and a position would be taken on those market operators that failed to renew their registration,” Yuguda said.

He noted that “Another important issue mentioned at the meeting was the approval of Rules on the revised National Investors Protection Fund (NIPF), and the registration of five (5) new FinTech companies as full-fledged market operators comprising two (2) crowdfunding intermediaries, two (2) digital sub-brokers, and one (1) robo-adviser. Full commencement of the Regulatory Incubation (RI) Programme for these companies was also announced during the meeting. Members received updates from CAMMIC Technical Committees and CEOs of Exchanges”.

“As part of its accomplishments, the Technical Committee on the Commodities Trading Ecosystem disclosed that it collaborated with the various Commodities Exchanges in discussions with NAICOM, the regulator of the Insurance industry. The aim of the engagement was to explore ways of deepening the market by encouraging the involvement of insurance companies, expanding insurance coverage for the commodities trading value chain, and implementing other mechanisms for mitigating risks in the ecosystem.

“Additionally, the Committee engaged the Nigerian Bulk Electricity Trading Plc (NBET) on modalities to establish an Energy Exchange. On its part, the Nigerian Agricultural Insurance Corporation (NAIC) worked with the Commission to continuously reduce risks in the agricultural value chain. The Commodities Trading Ecosystem Implementation Committee (CTEIC) welcomed the NAIC as a member to foster greater collaboration and support for the ecosystem.

“The Financial Literacy Technical Committee (FLTC) informed the meeting that as part of efforts to introduce capital market studies (CMS) into both secondary and tertiary educational institutions, the Nigerian Educational Research and Development Council (NERDC) has been providing all the necessary support to the committee. Also, the committee has organized series of public enlightenment programmes through conferences and social media platforms,” Yuguda further stated.

He said the e-Dividend Mandate Management Committee notified members of efforts to rebuild the E-Dividend Mandate Management System (e-DMMS). “The Committee reported on the redesigned e-DMMS platform, which incorporated stakeholder feedback. The Nigeria Inter-Bank Settlement System Plc (NIBSS) will be responsible for hosting and disseminating a comprehensive e-dividend form, while Registrars will validate them as part of the dividend payment process. The proposed launch date of the redesigned e-DMMS platform is July 31, 2023.

“The Non-Interest Capital Market Implementation Committee provided updates on various activities, including its ongoing engagement with the Federal Inland Revenue Services (FIRS) on the recently released regulations on taxation of non-interest financial instruments. The committee informed the meeting that SEC has received feedback from stakeholders on exposure of draft Rules on Shari’ah Advisory Services”.

The SEC further noted that “Given the availability of tax regulations for the non-interest segment of the market, and advancements in information technology, issuers of securities and their advisers were admonished to take advantage of the conducive environment to come up with financial products that will appeal to target classes of investors

“The meeting also received updates from Exchanges, such as, AFEX Commodities Exchange Ltd, FMDQ Securities Exchange Ltd, Lagos Commodities & Futures Exchange Limited (LCFE), Gezawa Commodities and Market Exchange, National Association of Securities Dealers (NASD) Plc, Nigeria Commodity Exchange (NCX) and the Nigerian Exchange Group.

“Issues around the importance of protecting the interest of minority shareholders when public companies delist from Exchanges were raised by members who expressed investors’ concerns. The Chairman reaffirmed his commitment to spare no effort in fulfilling the SEC’s mandate of both minority and majority shareholders”.

In conclusion, the Chairman expressed optimism about the growth potential of the Nigerian Capital Market and reaffirmed the Commission’s commitment to building and maintaining a vibrant, fair, and transparent market for investors and issuers alike.