SEC Reports 111% Growth in Nigerian Mutual Funds’ NAV
By Patience Ikpeme
The Nigerian Capital Market has witnessed a surge in the Net Asset Value (NAV) of Registered Mutual Funds, which has soared by 111.08% to N3.335 trillion.
This substantial growth underscores the resilience and dynamism of the market amid ongoing economic challenges.
Dr. Emomotimi Agama, the Director General of the Securities and Exchange Commission (SEC), made this disclosure during the Second Post-Capital Market Committee (CMC) briefing held in Lagos on Thursday.
In his address, Dr. Agama highlighted the remarkable progress of the Nigerian capital market in 2024, attributing the growth to strategic regulatory measures and increased investor confidence.
One of the standout achievements in the capital market this year has been the approval of nine new issuances, collectively valued at N1.228 trillion. This development, Dr. Agama noted, reflects a growing confidence in the market’s capacity to mobilize funds and support economic growth. These issuances are expected to further bolster market liquidity and provide a broader range of investment opportunities for both local and foreign investors.
The SEC has also intensified its efforts to protect investors, a commitment demonstrated by the recent conviction of a Ponzi scheme operator. Dr. Agama emphasized that the Commission is unwavering in its resolve to combat fraudulent schemes and other market malpractices. This crackdown is part of a broader strategy to enhance market integrity and restore investor trust, which is critical for sustained market growth.
In a bid to tackle the persistent issue of unclaimed dividends, the SEC is actively collaborating with key stakeholders to devise solutions aimed at reducing the volume of unclaimed dividends in Nigeria. Dr. Agama assured that progress would be reported to the Senate Committee within the next six months. This initiative is expected to streamline the dividend payment process and ensure that investors receive their rightful returns.
Further strengthening investor confidence, the SEC has implemented a robust Complaints Management Framework and established an Investor Protection Fund. These measures are designed to ensure that investors’ grievances are promptly addressed and that they are adequately compensated in the event of any market infractions.
Dr. Agama expressed optimism about the potential of the Nigerian capital market to align with the national agenda, particularly the Renewed Hope Agenda of President Bola Ahmed Tinubu’s administration. He emphasized the critical role of the capital market in mobilizing financing and facilitating the transfer of purchasing power from surplus to deficit sectors. This, he noted, is essential for reinforcing Nigeria’s position as Africa’s leading economy.
In recognition of the dynamic nature of the capital market, the SEC is planning to restructure the CMC to optimize its role in driving market growth and development. Since its inception in 2002, the CMC sub-committees have been instrumental in enhancing market efficiency, creating rules and standards, and developing new products. The proposed restructuring aims to unlock the full potential of the capital market and better serve the needs of the industry.
To manage systemic risks, the SEC has mandated Capital Market Operators (CMOs) to prepare and submit their enterprise risk management frameworks and annual risk profiles. The Commission is also collaborating with other financial sector regulators and agencies to support Nigeria’s efforts to exit the Financial Action Task Force (FATF) grey list.
The SEC has urged CMOs to ensure compliance with the Nigerian Sanctions Alert System and enhance reporting on Politically Exposed Persons (PEPs) and Suspicious Transaction Reports (STRs). In addition, the SEC is working on initiatives to make the rulemaking process faster and more efficient, including the codification of rules into a comprehensive rule book.
The SEC is also updating its rules on digital assets and has introduced guidelines for the banking recapitalization exercise. Moreover, the Commission is developing rules for Virtual Assets Service Providers, ensuring that emerging financial technologies are adequately regulated to protect investors.
In response to growing interest in private bonds, the SEC is reviewing its relevant rules and will soon release new guidelines to safeguard investors in this market segment. These initiatives reflect the Commission’s proactive approach to regulating new and evolving financial instruments.
Dr. Agama emphasized the importance of encouraging more companies to list on the Nigerian Stock Exchange. He called on the exchanges to take proactive steps to attract new listings, which would contribute to market making and liquidity. This push aligns with the government’s ambitious target of achieving a $1 trillion economy.
Cybersecurity remains a top priority for the SEC, with the Nigerian government implementing policies and establishing a cybersecurity committee within the capital market. The SEC is at the forefront of these initiatives, ensuring that critical information is managed and disseminated effectively to safeguard the market from cyber threats.
