SEC Woos Firms to Capital Market for Long-Term Funds, Streamlines Process

By Adedapo Adesanya

Acting Director General of the Securities and Exchange Commission (SEC), Ms Mary Uduk, has called on companies to tap into capital market for long-term finance that could have positive impact on the nation’s economy.

Ms Uduk, speaking last week at the Nigerian Stock Exchange (NSE) Interactive Session for Consumer Goods Sector, where she was part of panelists,said her agency recognises the importance of this, noting that the commission was arranging its processes to ensure that this runs smoothly.

The SEC chief spoke at the event on creating an enabling business environment for sustainable growth in the country as regards the ease of doing business, regulations, and tax considerations for businesses.

“We are arranging our processes to ensure that companies that come to the capital market to raise funds do that seamlessly without a lot of problems and that the turnaround time to market is very short,” she informed the audience, which included Business Post.

She admitted that the capital market faces stiff competition from the banking industry, but noted that banks would only give short-term capital to investors compared with what the capital market can offer. She said fundraising from the capital market remains the most viable option for a long-term capital.

“We realized that our major competitor to raise funds are the banks, even though you can’t compare because the banks will only give you short term capital.

“For you to raise that long-term capital that you need, it has to be the capital market,” Ms Uduk said.

She further added that, “In the past, to raise funds takes months because it was manual. We have harmonized our processes between the SEC and the Nigerian Stock Exchange.

“So, you do not need to file your application separately at the NSE and also file at the SEC.”

She also disclosed that the commission had approved a rule on e-offering as part of its bid to leverage technology for effective use in capital market which can ensure that the investor completes their dealings without any manual element which is cost operational.

“You can actually start and complete your capital raising up to investor investing without any manual process and therefore, time to market will be very short.

“You will be able to raise funds in a very short period at the NSE, because as we speak, they (NSE) have already applied for registration of the e-offer portal which the market worked on,” she said.

She also put out that the SEC has simplified the process of raising bonds that will go to institutional investors.

“We were doing it as we did with equities, trying to review it line by line, but right now with the interests of institutional investors, you can come in and raise bonds within a week because we now have checklist and redeem approval that you can come in and apply and once it is approved by SEC, you can go out and invest,” she said.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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