SEC Urges Retail Investors to Consider Mutual Funds, CIS to Reduce Risks

By Modupe Gbadeyanka

Acting Director-General of the Securities and Exchange Commission (SEC), Ms Mary Uduk, has advised retail investors in the nation’s capital market to consider embracing Collective Investment Schemes and Mutual Funds in order to minimise their risks.

Speaking in an interview in Abuja, the SEC chief said her agency has put in place a number of initiatives to protect investors as well as boost confidence.

“We advise investors to get their financial advisers to advise them properly on where to invest. In this area, we advise retail investors to invest in Collective Investment Schemes and Mutual Funds because those are managed independently by professionals and they are diversified thereby reducing risks. We are committed to protecting investors in the work we do,” she said.

Also, she urged shareholders to monitor their investments in the capital market, assuring that the apex regulator will live up to its responsibilities on investor protection.

“Investors have to be able to monitor their investments, attend annual general meetings as well as read the annual reports sent out to them.

“On our part, we protect them through the National Investors Protection Fund (NIPF); risk based supervision that enables us to supervise the operators to ensure that they do not do what they are not supposed to do.

“And again, the Complaints Management Framework enables investors to know where to complain to and how long it takes for such complaints to be resolved,” she said.

She further said the commission has set up a committee on identity management in the Nigerian Capital Market Regularisation of Multiple Subscription, Complaints Management Framework among others.

“To boost the e-dividend mandate and Direct Cash Settlement initiatives, we are engaging NIBSS (Nigeria Inter-Bank Settlement System) on behalf of the capital market community to facilitate identity validation and account validation in an effort to enhance market processes,” she said. She also said the electronic distribution of annual accounts by public companies to shareholders continues to record tremendous success, as shareholders have largely accepted the new initiative and are willingly providing their email addresses.