Aduragbemi Omiyale
By Aduragbemi Omiyale
A funding package for the deployment of a real-time automated market surveillance system has been secured by the Securities and Exchange Commission (SEC).
The fund, about $460,000, was provided by the African Development Bank (AfDB) Group through the Capital Markets Development Trust Fund (CMDTF), a multi-donor trust fund administered by the AfDB with support from the Ministry of Finance of Luxembourg and the Ministry of Foreign Trade and Cooperation of the Netherlands.
The system will modernise the Nigerian capital market and ensure that it is well positioned to support economic transformation driven by private sector investment.
A statement from SEC disclosed that the money would be used through the Nigeria Securities Market Surveillance System Project, which was designed by the agency to “preserve securities market integrity, boost investor confidence and enhance financial inclusion, among other expected outcomes.”
The Director-General of SEC, Mr Lamido Yuguda, thanked the lender for the facility, saying a market surveillance system is required to aid the regulator in detecting and addressing market abuse as quickly and efficiently as possible and to proactively prevent major infractions.
An automated market surveillance tool will enhance the commission’s role in investor protection, as well as ensure a transparent, fair and orderly market and reduce systemic risk, he said.
“With the successful acquisition of surveillance solution for the commission, SEC expects the following outcomes: the curtailment of market infractions; a modernized and technology-driven regulatory approach which enhances the protection of investors; enhanced investor confidence leading to the increased participation of domestic investors (both institutional and retail) in the capital market,” he said.
Mr Yuguda said the surveillance solution would also aid an increased impact on GDP through the capital market’s role in the efficient intermediation and allocation of capital to the real economy to create jobs, encourage savings and facilitate wealth creation as well as Increased investment in the economy through Foreign Direct Investments (FDIs) and growth in the rate of domestic investor participation in our markets.
He disclosed that the agency was currently implementing a comprehensive market and institutional reform program intended to reposition the Nigerian capital market to be globally competitive and an attractive destination for investment activities in Africa. The 10-year Capital Market Master Plan (2015-2025) sets the vision, objectives and initiatives required to achieve this goal.
The commission, he said, has recorded significant traction and successes in achieving some key master plan objectives such as full dematerialization of share certificates, recapitalization of capital market operators, the launch of a national investor protection fund, new corporate governance scorecard for public companies, and electronic dividend mandate management system, amongst others.
On his part, the DG of AfDB Group, Mr Lamin Barrow, explained that, “The introduction of a surveillance system will enhance oversight over securities trading across all existing and future trading platforms and all tradable securities and products by the SEC. It will therefore preserve securities market integrity, boost investor confidence and enhance financial inclusion, among other expected outcomes.”
He said to ensure sound implementation and sustainability, the design of the technical assistance project embeds training activities to strengthen the capacity of users of the securities market surveillance system, and the preparation of relevant operational manuals and workflow processing and document management for the surveillance solution.
