By Taofik Salako, Capital Market Editor
Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) plans to deploy a real-time automated market surveillance system that will enable it to monitor real-time activities at the capital market and proactively forestall market abuses.
The planned deployment is the highpoint of the capital market development agenda of the apex regulator for the year.
A real-time surveillance system allows SEC to monitor live trading across the registered exchanges and other channels, thereby providing the Commission with independent eyewitness evaluation of market activities.
Acting Director-General, Securities and Exchange Commission (SEC), Ms Mary Uduk, at the weekend outlined the development agenda of the Commission in teh year as part of efforts to restore investor confidence and increase participation in the capital market.
She listed other initiatives to include driving the growth of Collective Investment Schemes (CIS), capital market literacy and completion of the infusion of capital market into schools’ curricula and further robust engagement with sister agencies like the Central Bank of Nigeria, National Pension Commission and National Insurance Commission to ensure consideration of the capital market in policy making.
She added that the Commission would also be leveraging the success of the e-dividend initiative to drive implementation of direct cash settlement with a view to solving the problem of multiple subscription.
Speaking at a Capital Market Correspondents Association of Nigeria’s (CAMCAN) forum sponsored by SEC in Lagos, Uduk outlined other major initiatives to be implemented this year to include minimum operating standards for operators, reduction of time-to-market for issues, mainstreaming the Capital Market Master Plan (CMMP) into national economic policies, driving adoption and development of financial technology (FinTech) and innovation in our market and development of the commodities and derivatives segment of the market among others.
She noted that the capital market requires concerted efforts by stakeholders to improve domestic participation and insulate the market from the frequent shocks due to fluctuation in the global investment markets.
“Our market’s performance is reasonably influenced by activities of foreign investors such that their instantaneous exit poses a challenge.
This is a problem faced by many other countries but efforts are continually being made by the Commission to increase retail investors’ participation in the Nigerian capital market.
The Commission believes that there is a nexus between increased market participation and market efficiency,” Uduk said.
She urged investors to embrace collective investment scheme, otherwise known as mutual funds as a way to mitigate risks and tap into diversified portfolios being managed by professionals.
She projected that the size of mutual funds in the country would rise to N1.5 trillion in the year as the Commission was working on strategies to deepen the mutual fund segment.
Uduk, who was represented by the Head, Office of Economics at SEC, Mr Okey Umeano, noted that mutual fund forms a major part of most advanced markets.
“We, at the Commission, have discovered that some of the investors who lost their savings during the crisis in 2008 are low in confidence.
That is the reason we are encouraging retail investors to go through these mutual funds because they are set up and approved by capital market operators and SEC regulates them,” Uduk said.
SEC Divisional Head, Economic, Research and Policy Management, Dr Afolabi Olowookere, said the Commission expects to see a significant rise to N1.5 trillion or N2 trillion in mutual funds.
Olowookere noted that about 480,000 investors had keyed into that the investment segment pointing out that mutual fund brings some form of stability for investments.
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