Capital markets have been described as avenues for increasing asset value and wealth creation whose smooth functioning and efficiency are essential for sustainable national economic growth.
This was stated by the Speaker of the House of Representatives, Femi Gbajabiamila, during a public hearing / submission of memoranda on the Investments and Securities Bill and the Chartered Institute Bill of Stockbrokers in Abuja on Tuesday.
Represented by Peter Akpatason, the Chairman said that capital markets provide funding for new and existing businesses to innovate, grow, adapt to market changes and advancements and also allow small and large investors to contribute to the business growth and, in doing so, create wealth and economic development.
“The two bills to be considered today are consistent with our commitment to the legislative agenda of the 9th House of Representatives to pursue far-reaching reforms of our nation’s critical institutions. Our ultimate goal is to ensure that these institutions are properly founded to fulfill their functions, carry out their mandate and best serve the interests of the Nigerian people.
“The need to ensure that the operations of the capital market and of the entire industrial sector are sufficiently fair and transparent to guarantee the confidence of investors is of particular concern. It is often said that capital is loose and runs at the slightest risk. In this new global economy, where investors have the ability to move money quickly between industries, nations and countries, we cannot allow loopholes in the system to cause investors to worry about security. of their investments.
“I am delighted that many industry players have gathered today in this public hearing to participate in this public hearing and I urge you to take full advantage of this public hearing to make thoughtful contributions so that the final legislation that emerges from this process can adequately reflect the talents and expertise of the men and women who manage and regulate the capital market in Nigeria”.
In his address, the Chairman of the House Committee on Capital Markets and Institutions, Hon. Babangida Ibrahim said the ISA Bill seeks to repeal the existing Investments and Securities Act 2007 and establish a new market infrastructure and comprehensive regulatory system for investments and securities businesses in Nigeria, in particular in the areas of derivatives, systematic risk management and financial market infrastructure. and Ponzi scheme and platforms.
Other areas the bill seeks to address are alternative trading systems, the inclusion of the National Pension Commission on the board of the Securities and Exchange Commission, the removal of merger control provisions from the current law and modification of borrowing criteria by sub-nationals. and the strengthening and enforcement powers of the Securities and Exchange Commission (SEC) in accordance with the requirements of the International Organization of Securities Commissions (IOSCO).
He said the bill should also determine the type of trainings required of an operator to perform professional functions in the capital market and also provide certification to those deemed to have met the qualification standards.
“The law will lead to the transformation of the market from manual to automated, from manual to multiple stock exchanges, the influx of foreign professionals into the country and the need to harmonize standards. The bill will also expand the range of products in the market, stocks, bonds, sukuk, derivatives and the advent of electronic issuance of shares.
“Opportunities like this give us the opportunity to think things through, work together and come up with solutions to capital market challenges. The Securities and Exchange Commission, as capital market regulators, has the responsibility to ensure a well-regulated, dynamic, fair, transparent and efficient capital market for the economic development of the country,” he said.
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Hon. Ibrahim said the House of Representatives and indeed the Capital Markets Committee are committed to ensuring that the SEC fulfills its primary mandate of properly registering capital market participants, market integrity, systemic risk avoidance, collateral inspection, investigation of breaches, appropriate oversight, market development and law enforcement and rulemaking.
“This committee is indeed proud of these bills as they seek to ensure a more robust, vibrant, prosperous and more developed capital market and also to ensure that the capital market is well institutionalized and accountable.
“We hope that the resources of Nigerians in the capital market will remain safe, responsible and prosperous. The capital market is a real tool for wealth creation and we will ensure that it is so for Nigerians. If there was ever a time when we should rally together for the economic good of Nigeria, it is now and now is the time”.
Also speaking, SEC Chief Executive Lamido Yuguda said that having applied the current enabling law since July 2007, the Commission has observed areas requiring review to strengthen existing provisions, remove ambiguities, to introduce new provisions that would improve the international competitiveness of the Nigerian capital market and reposition the market to catalyze national economic transformation.
Yuguda said: “Given the evolution of the market since the adoption of the 2007 ISA, it was the consensus of key stakeholders in the financial markets community that a complete overhaul of the ISA through of a new draft law is necessary in order to achieve the objective of consolidating the efficiency, transparency and viability of the market.
“It should also be noted that the Nigerian Capital Market Master Plan (2015-2025), which was launched by the Commission in 2014, strongly recommends the overall strengthening of the legal and regulatory framework that underpins market operations. capital.
“The Commission is delighted to state that the Investment and Securities Bill 2022 has overwhelming support from Nigerian capital market stakeholders. There is a collective will in the financial markets community to work together to enact this bill for the duration of the 9th National Assembly.”
The CEO of the SEC listed some of the highlights of the major innovations and changes in the 2022 Investments and Securities Bill, including: the creation, purposes, functions and powers of the SEC; Inclusion of the National Pensions Commission on the SEC Board and its members; Registration/regulation of stock exchanges and financial market infrastructures; Systemic Risk Management; and Public Offers, Sale of Securities and Invitations to the Public.
Other major highlights according to Yuguda are: mergers, takeovers and corporate restructurings; Collective investment schemes; Investor Protection Fund (REIT); Commodity exchanges and warehouse receipts; Issuance of securities by federal, state and local governments and their agencies and establishment, jurisdiction, authority and procedure of the Investments and Securities Tribunal.
Yuguda asserted that it is a well-known fact that efficient capital markets are essential to the functioning of a modern economy, asserting that no economy can achieve significant progress without the important role that capital markets play in the provision of medium and long term financing.
“There is no doubt that Nigeria indeed needs and deserves an internationally competitive and well-functioning capital market to facilitate the ongoing economic diversification. The passage and enactment of the Investments and Securities Bill 2022 will be a crucial step in this direction. The Commission therefore enjoins and calls for buy-in from key stakeholders to make this aspiration a reality,” he added.