To modernise Nigeria’s capital markets and position it to support economic transformation driven by private sector investment, the Securities and Exchange Commission (SEC) and the African Development Bank Group (AfDB) have signed an agreement for a grant on market surveillance system project.
The grant valued at $460,000, is to finance technical assistance and capacity building for capital markets development under the “Nigeria Securities Market Surveillance System Project.”
Speaking at the ceremony in Abuja yesterday, the Director-General, AfDB, Lamin Barrow, said the grant from the Capital Markets Development Trust Fund (CMDTF), a multi-donor trust fund.
The fund, which is administered by the Bank and supported by the Ministry of Finance of Luxembourg and the Ministry of Foreign Trade and Cooperation of the Netherlands, will support the acquisition, installation and deployment of a real-time automated securities market surveillance system of the Nigeria capital markets.
Barrow said: “Today’s ceremony marks yet another important milestone in our partnership and efforts to modernize Nigeria’s capital markets and ensure that it is well-positioned to support economic transformation driven by private sector investment.
“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 added that 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.
He said the project is derived from Nigeria’s efforts to promote the development of a competitive, deep and liquid capital market supported by an enabling regulatory environment that can efficiently mobilize resources, the private sector and international capital to finance sovereign and corporate investment programs.
“The technical assistance support builds on the SEC’s initiatives to strengthen the supervisory and regulatory framework as well as enhance market integrity and transparency under the Nigeria Capital Markets Development Master Plan 2015-2025, with a view to positioning Nigeria as an attractive destination for portfolio investments.
“It also aligns well with the Bank’s Country Strategy Paper for Nigeria 2020-2024, which recognizes the importance of sound, well-regulated, resilient, effectively functioning and globally competitive financial markets in Nigeria for sustainable growth and development,” he said.
It will therefore preserve securities market integrity, boost investor confidence and enhance financial inclusion, among other expected outcomes.
Investor protection
In his remarks, the Director-General, SEC, Lamido Yuguda, said the Commission is very pleased and thankful to AfDB for providing the grant support to execute these very important projects, particularly the project to acquire a surveillance solution.
Yuguda said 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.
He noted that 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 a surveillance solution for the Commission, the SEC expects the following outcomes: the curtailment of market infractions; a modernized and technology-driven regulatory approach which enhances the protection of investors; and enhanced investor confidence leading to increased participation of domestic investors (both institutional and retail) in the capital market.
It will also aid increased impact on the gross domestic product (GDP) through the efficient intermediation and allocation of capital to the real sector to create jobs, encourage savings and facilitate wealth creation as well as increased investment in the economy through foreign direct investments and growth in domestic investor participation in the markets.
Yuguda disclosed that the SEC is 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.
He said: “The SEC is at a critical halfway point in the implementation of the Capital market Master Plan where the deployment of market surveillance infrastructure has become exceedingly necessary. In addition, the SEC is focusing on capacity development as a catalyst to drive the actualization of other strategic initiatives in the plan.
“We believe that your support and our collaboration underscore the Commission’s and the Bank’s mutual goal to grow the capital market and create viable avenues for sustainable economic growth for Nigeria and the region,” he added.
