SEC Unveils Initiatives to Boost Market Efficiency and Economic Growth
By Patience Ikpeme
In a bid to enhance the efficiency and attractiveness of the Nigerian capital market, the Securities and Exchange Commission (SEC) has implemented several strategic initiatives aimed at reducing the time to market. This development is part of broader efforts to foster economic growth and development by ensuring that companies can access capital more quickly and efficiently.
Dr. Emomotimi Agama, Director General of the SEC, outlined these initiatives in a recent statement. He emphasized that reducing the time to market offers multiple benefits, including increased market liquidity, quicker access to capital for companies, and more efficient resource allocation—all of which are crucial for driving economic growth.
“The introduction of streamlined registration processes, an electronic filing system, and enhanced regulatory frameworks are some of the steps we’ve taken to achieve these objectives,” Agama stated. He noted that these measures are designed to not only speed up the listing process but also to build investor confidence by ensuring that the capital market operates transparently and efficiently.
Among the SEC’s notable initiatives is the introduction of an electronic Public Offering (e-PO) system. Launched in 2019, the e-PO system automates the securities issuance process, significantly reducing the reliance on manual paperwork. This innovation facilitates broader participation in the capital market by enabling faster processing of applications and ensuring a more inclusive market environment.
“The implementation of the e-PO is part of our broader effort to make the market more efficient,” Agama said. He further highlighted that digitizing the Commission’s operations, particularly in the submission and processing of securities registration applications, has been pivotal in reducing delays associated with manual processes. This digitization includes the use of electronic platforms for document submissions and approvals, which not only speeds up the process but also enhances transparency.
To complement these technological advancements, the SEC has also undertaken regulatory reforms aimed at simplifying and streamlining the approval processes. These reforms include updating existing rules to reflect current market realities and adopting international best practices. For instance, the Commission introduced a checklist review for the registration of fixed income securities, effectively shortening the review and approval timelines.
In June 2024, the SEC issued a comprehensive framework on the banking sector recapitalization program. This framework outlines the guidelines and procedures that banks must follow to raise capital during the recapitalization period. It serves as a comprehensive guide for banks, holding companies, and market participants, ensuring that the capital raising and mergers and acquisitions processes are smooth, transparent, and efficient.
A major highlight of the framework is the requirement for an e-offering platform, provided by a Securities Exchange, for the capital raising exercise. This platform allows for an end-to-end offering, subscription, and payment process, significantly enhancing the efficiency, transparency, and integrity of the recapitalization program. “The use of an e-offering platform also eliminates the issue of multiple identities and reduces the potential for unclaimed dividends,” Agama added.
The SEC has established a joint team with the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to facilitate the recapitalization program. This team is particularly focused on capital verification, a prerequisite for allotment clearance.
Expressing satisfaction with the progress made so far, Agama assured that the current SEC management is committed to unlocking the full potential of the Nigerian capital market. This commitment aligns with the Renewed Hope Agenda of President Bola Ahmed Tinubu’s administration, which seeks to drive sustainable economic development.
“We will continue to do our utmost to ensure that the capital market is well-positioned to drive economic development,” Agama affirmed. He emphasized the Commission’s dedication to swiftly processing approvals for issuances, ensuring that companies have a clear timeline for when they can expect to receive market access.
As the SEC continues to innovate and streamline its operations, these efforts are expected to significantly reduce the time to market, making Nigeria’s capital market more competitive and attractive to both domestic and international investors.
