Chinwendu Obienyi
Mary Uduk, the new Acting Director-General of the Securities and Exchange Commission, (SEC), joined the Commission in 1986 as an assistant financial analyst.
Her career as a regulator has spanned several functions and departments in the Commission, from corporate finance, administration, to providing structural, policy and due diligence for capital market transactions.
She has also been responsible for managing several landmark capital market projects, including the registration of Capital Market Operators, articulating rules for bonds and equities; Mergers, acquisitions and Takeovers, and managing the banking and insurance industry consolidations between 2005-2007.
Uduk served as the pioneer Head of the Operations Division in the Lagos Zonal Office, and has headed various Departments in the Commission, including Internal Control, Investment Management, Financial Standards and Corporate Governance and Securities, and Investment Services Department, among others.
Excerpts:
High points of 2018 Capital Market Committee (CMC) meeting
The CMC, over the past 18 years has proven to be an important platform that brings together stakeholders in the capital market to discuss issues germane to the development and orderly conduct of the market.
During the meeting, we solicited the support of all stakeholders having acknowledged the enormous challenges before us. We also expressed our commitment to ensure that we deliver on the mission and vision of the Commission.
We discussed the Commission’s efforts in collaboration with the National Educational Research and Development Council (NERDC) to institute a stand-alone capital market curriculum for basic and senior secondary education in the country. To this end, trade groups made commitments at the meeting to support this initiative.
In the same vein, the Technical Committee working on developing a vibrant commodities market for Nigeria presented its report at the meeting where we agreed that the report will be exposed to the public to elicit comments and inputs from all stakeholders.
The Commission also updated the market on the status of its database registration exercise for Capital Market Operators (CMOs). The SEC (Securities and Exchange Commission) website now has a list of all CMOs and their functions. We used the occasion to inform stakeholders that the Commission has issued a new set of registration certificates to operators without expiry dates and these are available at our head office and Lagos Zonal Office.
The CMC noted that the distribution of electronic annual accounts of public companies has commenced. However, we also received feedback on concerns from some shareholders’ associations. It was resolved that the market will deliberate further on the matter while the pilot period of one year would be allowed to go on.
Unlisted companies
In as much as the capital market will like to attract as many companies as possible, the decision to be listed rests with individual companies. All we do is to encourage companies and let them see the benefits of being listed. However, all public companies, whether listed or not, are expected to register their securities with the Commission. We also have rules stipulating that shares of public companies can only be transferred on SEC-approved trading platforms/ exchanges. Thus, even when a company delists, its shares can still be traded on, say, NASD OTC Plc. In addition, the Commission is liaising with the Corporate Affairs Commission (CAC) to ensure that companies comply with registration of their securities and exchanging such securities only on SEC-approved platforms.
Terms of reference of the committee on listing
The mandate of the committee is to drive advocacy and other activities towards increasing the number of listed companies on our exchanges. Their broad terms of reference are to propose strategies to attract listings from target sectors; undertake relevant advocacy as well as other activities that may be relevant to the achievement of this mandate.
New mandate given to that committee is to find out why a number of companies are delisting. Are there regulatory issues? Is it that they are having issues with compliance with our regulations? We have given them a mandate to come up with recommendations so that if we need to amend our rules to attract more listings, we will look at international best practices and do that. If we have to talk to other government agencies and stakeholders, we will equally do so.
Boosting investors’ confidence
This team is not different from the ones that have been there. The fact that there is a change has not changed the direction in which the SEC is going. I worked alongside the former Acting DG and everything he planned to do, we all planned it together. SEC is the only place I have ever worked and I have worked across almost all the departments. So anything that hurts the Commission hurts me as well. The Commission is like our baby and given all of that, it will continue to do all it has been doing before to instill confidence in the market. Members of the new management team have worked in the Commission for many years with experiences in different departments and aspects of the capital market. We have always been part of the efforts at improving investors’ confidence and implementing the capital market master plan.
The master plan will continue to be our working document and we shall continue to implement initiatives that will promote investors’ confidence such as e-dividend registration, direct cash settlement, dematerialisation, complaint management framework, financial literacy and investors’ protection fund, among others.
Effects of closed window free e-dividend
It is important to state that e-dividend registration has not ended; it is free registration that ended March 31, 2018. Before the deadline, the Commission was bearing the cost of registration, but the new direction now is that banks and NIBSS, along with registrars will charge a token sum of N150 per mandate. We are still soliciting for co-operation from the public to key into electronic dividend payment as this is what will address the fundamental issue of unclaimed dividend.
Total number of approved mandates
As at end of March 2018, the total approved mandates were 2.49 million translating into 466,000 unique investor accounts
Promoting electronic IPO
Globally, capital markets are moving towards electronic IPOs (e-IPO) and the Nigerian capital market is working to adopt this trend. A committee was set up during the meeting comprising SEC, Nigeria Stock Exchange (NSE), Association of Issuing Houses of Nigeria (AIHN), Association of Stock Brokers of Nigeria (ASHON), Central Securities and Clearing System(CSCS), Institute of Capital Market Registrars (ICMR), Capital Market Solicitors Association (CMSA), Fund Managers Association of Nigeria (FMAN), and NIBSS.
Multiple subscriptions and forbearance
On multiple subscriptions and forbearance for shareholders with multiple accounts, the forbearance window has now been extended to September 2018. Registrars have acknowledged that investors have started coming forward but there are still some challenges in the process. The CMC deliberated and recommended the appropriate Technical Committee to seek input and come up with recommendations to address these challenges. Therefore, we encourage all affected investors to come forward and take advantage of the window before the new deadline ends.
Other issues considered by CMC
The Technical Committee on Non-Interest capital market also presented its report and noted that the first sovereign sukuk, which was issued in 2017 had about 1,600 retail investors that invested N5 billion in the instrument. The committee’s next level of engagements is to work with supra-national entities (such as IFC, AfDB), state governments, institutions (such as Federal Mortgage Bank, NMRC) to include sukuk options in their capital investment plans.
Cryptocurrencies
As part of our investor protection mandate, the Commission wishes to alert the public to exercise extreme caution with regard to cryptocurrencies as a vehicle of investment especially as no individual, companies or entities promoting cryptocurrencies has been recognised or authorised by SEC or by other regulatory agencies in Nigeria. They have also not been authorised to receive deposits from the public or to provide investment or other financial service outside Nigeria.
Impact of the initiatives so far
We are carrying out an impact evaluation to find out how all of these initiatives are impacting the market and thereafter find out what we should do. I cannot really state the number of people now because we are new and it takes time to get the actual result, but as time goes on, when we carry out the research, we will get the actual figure.
