Chinwendu Obienyi
Appraising the performance of the Nigerian capital market, reflects a sector that has continued to respond proactively to emerging global trends following innovative strategies being adopted by those saddled with the responsibility of guiding the investment market towards desirable direction for sustainable growth in the last two years.
As it were, the Nigerian Stock Exchange (NSE) serves as the hub for formal transactions in equities and other instruments like its counterparts in other economies. Beyond the official listing and trading of stocks and other securities on the bourse, lies the more fundamental ‘regulatory radar’ being provided by the Securities and Exchange Commission (SEC).
A cursory assessment of the Commission’s strides reflected that the Uduk-led administration, has taken a firm grip on the mantle despite the setbacks of the pervasive effects of the slow economic activities on the nation’s capital market and even in the face of the novel coronavirus (COVID-19) pandemic.
When the former Minister of Finance, Kemi Adeosun, on April 13, 2018 approved the appointment of Mary Uduk as the Acting Director General of the commission, she described it as the reassignment of portfolios in the capital market regulatory body.
However, doubts regarding the appointment were raised as it came at a time when stakeholders clamoured for a corrupt-free and a consistent board.
Speaking during her first briefing with newsmen in Lagos in 2018, Uduk said her primary task was to restore investor’ confidence in the nation’s capital market system and by so doing make the Nigerian investment space attractive to global and domestic investors, notwithstanding the nation’s economic challenges.
“Investors have lost a lot of money due to the challenges facing the economy. Right now, the confidence is low and so what these investors need is adequate protection. We are also on a mission of fulfilling the SEC’s statutory mandate through team work, collaborative engagements of stakeholders and a deep sense of purpose”, She said.
Hence, the SEC’s leadership in collaboration with the exchanges, have not fared badly in its bid to meet up with its objectives in sustaining investors’ confidence in the capital market; instilling discipline in transactional processes in the bourse; enlightenment and engagement of investors and their associations on emerging trends in global investment space.
SEC’s achievements
The Uduk-led leadership of the SEC has continued to promote the E-Dividend Mandate Management System(E-DMMS), the Direct Cash Settlement(DCS) and the multiple subscription service option for investors. In addition, the SEC has raised the bar of investors’ confidence through the National Investors Protection Fund (NIPF) Risk-Based supervision and the Complaints Management Framework that opens communication channels for investors to lodge complaints and get prompt responses.
The importance of the E-DMMS is to eradicate or reduce to the barest minimum the incidence of unclaimed dividend. To boost the e-dividend mandate and Direct Cash Settlement initiatives, the commission engaged the Nigeria Inter-Bank Settlement System (NIBSS) on behalf of the capital market community to facilitate identity validation and account validation in an effort to enhance market processes.
The partnership has yielded into 2.7 million accounts mandated and 3.4 billion units of shares regularised shares under the E-DMMS and multiple subscriptions.
The Commission has also embarked on sundry initiatives to protect the public from fraudulent or scam investment promoters while issuing several warning notes,urging the investing public to refrain from investing their money in outfits not registered with the SEC.
Only recently, the Commission released a list of 12 unlawful/unlicensed investment schemes which are: Loom Nigeria Money, Box Value Trading Company Ltd, Now-Now Alert, Flip Cash Investment, Result Investment Nigeria Limited, Helping Hand and Investment and No Failure Development and Empowerment Nig. Ltd.
Others are MBA Forex and Investment Ltd, Federate Investors Trading Company, Jamalife Helpers Global Ltd, Flexus Global Solutions and Investment Ltd, United Capital Investment Company Limited.
Also, the capital market regulatory institution initiated a collaborative relationship with the Nigerian Educational Research and Development Council (NERDC) on the development of a curriculum for basic and secondary schools on Capital Market studies as part of the Uduk-led management’s futuristic approach in Nigeria’s capital market development.
Progress is said to have been made in reviving activity in mutual funds as the Commission recently said it expects a N1.5 trillion growth in that segment of the capital market before the end of the year. Again, as a proof of the SEC management’s commitment to promoting Small and Medium Enterprises, (SMEs), foster economic development and deepen the market, the regulator released draft rules on Crowd Funding. The rule seeks to further deepen the nation’s capital market and enable it to provide developmental capital for medium and small-scale enterprises of the economy, in line with global best practices.
Complementarily, the Commission as at last October held a round table on Commodities Trading Ecosystem which was followed with an International conference in March 2020.
Uduk, emphasized the need to have a vibrant commodities exchange in the country which will ensure that Nigeria realizes its full potential in the commodities market as well as boost foreign exchange earnings.
Furthermore, with the rising cases of the COVID-19 in the country, measures were put in place to ensure the market did not shut down. For instance, the NSE, FMDQ and all other exchanges have continued trading remotely.
Uduk said, “In the past, we talked a lot about financial technogy and how it has disrupted the market but now its COVID-19 hitting the market, disrupted everything the way it is and, therefore, as human beings we have to adapt to be able to ensure that our lives continue and not allow the virus to put our lives on hold, and we are leveraging on technology. Initially, people were afraid of technology but right now it has become a saving grace”.
Stakeholders react
Speaking during a courtesy visit to the NSE in Lagos recently, Chairman, Senate Committee on capital market, Senator Ibikunle Amosun, lauded the efforts of the Uduk-led administration while calling for more to be done to ensure the capital market continues playing its role in rescuing the economy in the light of the COVID- 19 pandemic which has hit global markets.