SEC Unveils New Initiatives to Boost Capital Market Growt
By Patience Ikpeme
The Securities and Exchange Commission (SEC) has introduced a series of initiatives aimed at revitalizing the nation’s capital market.
This is a strategic move to align with the Federal Government’s ambitious goal of transforming Nigeria into a $1 trillion economy.
This disclosure was made by the Director-General of the SEC, Dr. Emomotimi Agama, during his first post-Capital Market Committee (CMC) press briefing in Lagos over the weekend.
Dr. Agama emphasized the SEC’s commitment to fostering a dynamic and robust capital market that can support Nigeria’s economic aspirations. Central to this is the Commission’s ongoing efforts to encourage more companies to list on the Nigerian Exchange, thereby enhancing market making and liquidity. Dr. Agama urged the exchanges to actively pursue new listings, noting that an increase in the number of listed companies is critical for achieving the government’s $1 trillion economy target.
“The Commission is determined to unlock the full potential of our capital market, which is essential for the success of the Renewed Hope Agenda under the President Bola Ahmed Tinubu administration,” Dr. Agama stated.
In a bid to improve market regulation, Dr. Agama outlined several initiatives aimed at making the rulemaking process faster and more efficient. He announced that the SEC is currently in the process of defragmenting its rules, with the ultimate goal of codifying them into a comprehensive rule book. This approach is expected to streamline regulatory processes and ensure a more cohesive legal framework for market participants.
Additionally, the SEC is updating its rules on digital assets, a crucial step as the financial landscape continues to evolve. The Commission has also put in place guidelines for the ongoing banking recapitalization exercise and has developed a framework for onboarding Virtual Assets Service Providers (VASPs).
Recognizing the importance of engaging Nigeria’s youthful population, Dr. Agama highlighted the SEC’s focus on attracting millennials—who make up 70% of the country’s population—to actively participate in the capital market. By updating rules on digital assets and introducing guidelines for VASPs, the SEC aims to create an environment that is more inclusive and appealing to younger investors.
Dr. Agama called on Capital Market Operators (CMOs) to invest in modern technology to enhance trading platforms and data dissemination. He stressed that embracing technological advancements is key to maintaining a competitive and efficient market.
To further stimulate investor interest, the SEC is advocating for the introduction of new financial products such as derivatives, Real Estate Investment Trusts (REITs), and Exchange-Traded Funds (ETFs). These products, according to Dr. Agama, have the potential to diversify investment options and attract a broader range of investors.
The SEC remains vigilant in the fight against cybersecurity threats, which pose a significant risk to the integrity of the capital market. Dr. Agama revealed that the Nigerian government has implemented various policies to safeguard the market, including the establishment of a cybersecurity committee within the capital market, with the SEC leading these efforts.
“These initiatives underscore the SEC’s commitment to fostering a secure and robust capital market environment in Nigeria,” Dr. Agama affirmed.
In his address, Dr. Agama underscored the importance of strengthening regulatory bodies, enhancing enforcement, and adopting international best practices to boost market efficiency, transparency, and global competitiveness. He emphasized that promoting good corporate governance, encouraging private sector investment, and developing alternative assets are crucial to the continued growth and development of Nigeria’s capital market.
Dr. Agama also shared significant developments in the Nigerian capital market for 2024. Notably, the SEC approved nine new issuances totaling ₦1.228 trillion, a reflection of increased confidence in the market. In the fund management space, the Net Asset Value (NAV) of Registered Mutual Funds experienced a remarkable growth of 111.08%, reaching ₦3.335 trillion. This substantial growth in NAV signals strong and sustainable momentum in the market, further reinforcing investor confidence.
