SEC Begins Process of Banking System Recapitalization
By Patience Ikpeme
The Securities and Exchange Commission (SEC) has announced that the process of raising funds from the capital market for the purpose of banking system recapitalization will commence this quarter.
This was disclosed by Director-General Lamido A. Yuguda during a webinar with journalists after the Capital Market Committee (CMC) meeting held on Friday.
Yuguda outlined several measures that have been put in place to ensure a smooth, efficient, and investor-centric process for the upcoming banking sector recapitalization exercise.
The SEC is committed to avoiding past mistakes and will soon issue appropriate guidelines to facilitate an efficient capital raising process. These guidelines will prioritize speed, fairness, and good market conduct.
In addition, the SEC is working closely with the Central Bank of Nigeria (CBN) and other relevant agencies to ensure a seamless recapitalization process. Protecting investors remains a core priority for the SEC, and the guidelines will emphasize the benefits of past exercises while safeguarding the interests of participants in capital offerings.
The SEC is leaning towards a paperless, digital recapitalization process. Yuguda cited recent successful examples in the market to demonstrate the viability of this approach. A digital format would promote inclusivity, especially for younger demographics who are accustomed to electronic transactions.
The director-general expressed confidence in the Nigerian capital market’s ability to support the recapitalization. He mentioned instances of large companies successfully raising substantial capital, highlighting the market’s depth and financing capabilities.
Yuguda also shared other developments within the Nigerian capital market. The Non-Interest Capital Market Committee is exploring non-interest instruments for financing, which could potentially open new avenues for asset securitization and infrastructure projects.
Additionally, collaboration between the Committee and the Islamic Banking and Finance Institute of Malaysia will provide training and collaboration opportunities for Nigerian Islamic finance institutions.
Yuguda revealed that the Lagos Commodities and Futures Exchange will soon list Gold, Lithium, and Oil and Gas futures contracts, expanding opportunities for traders and investors in the commodities space.
Furthermore, the SEC has granted approval for five infrastructure fund shelf programmes totaling N1.5 trillion, which signifies a significant step in supporting the Federal Government’s infrastructure development goals.
Yuguda also mentioned the continued growth in the Fund Management industry. The SEC has approved new mutual funds and discretionary/non-discretionary investment products.
There has also been an enhanced investor protection through a requirement for all Collective Investment Scheme (CIS) funds to be held in custody. This measure safeguards investor assets and promotes market stability.
