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Tag: SEC

  • SEC cancels BGL’s registration

    SEC cancels BGL’s registration

    The Securities and Exchange Commission (SEC) has cancelled the registration of BGL Securities Limited and that of BGL Assets Management Limited.

    The SEC through its Administrative Proceedings Committee (APC) said after investigating complaints against the two capital market entities, it discovered that the indebtedness of the two companies to the complainants stood at ₦2,184,474,991.65 (Two Billion, One Hundred and Eighty Four Million, Four Hundred and Seventy Four Thousand, Nine Hundred and Ninety One Naira, Sixty Five Kobo).

    The SEC said it received several complaints against BGL Securities Limited and BGL Assets Management Limited “over failure, refusal and/or neglect to liquidate their investments in both the Guaranteed Consolidated Notes (GCN) and Guaranteed Premium Notes (GPN).”

    The capital market regulator disclosed that “upon investigation of the complaints it was also revealed that the act was carried out through Albert Okumagba and one other respondent.”

    In a bid to obtain justice for the complainants and grant all parties fair hearing, the matter was presented before the Administrative proceedings Committee (APC) of the Securities and Exchange Commission (SEC). Upon confirmation that all parties to the matter had been served hearing notices, the SEC APC sat and heard the matter on February 6, 2016. During the proceedings testimonies and documentary evidence were tendered by various parties.

    The SEC APC said it arrived at a decision which has been approved by the relevant authority.

    The decisions of the Committee are as follows: that by their actions and/or omissions, 21 of the 23 r”espondents engaged in acts capable of adversely affecting the investing public’s image of, and confidence in the capital market.” That BGL Securities Limited refund the sum of N855,539,809.55 (Eight Hundred and Fifty Five Million, Five Hundred and Thirty Nine Thousand Eight Hundred and Nine Naira Fifty Five Kobo).

    The committee added that “pursuant to Section 304 of the Investments and Securities Act 2007 all information on possible criminality in this matter be and is hereby referred to the appropriate law enforcement agencies and the Enforcement Department of the Commission shall follow up and ensure that the matter is brought to a logical conclusion.”

    The Committee further passed the following sanction on the under listed respondents as follows: BGL Securities Limited, cancellation of registration and a fines of N5 million, N10 million and N7 million for breach of rule 1(III) of the code of conduct for capital market operators and their employees rules 22(4) and 63 of the SEC rules.

    Also, BGL Assets Management Limited had its registration cancelled and was fined N5 million for breach of rule 1(III) of the code of conduct for capital market operators and their employees.

    Albert Okumagba and Chibundu Edozie were fine N100,000 for breach of rule 1(III) of the code of conduct for capital market operators and their employees and each banned for 20 years from engaging in capital market activities. Peter Adebola was handed down a five year ban but no fine while Joseph Ashley-Osuzoka was banned for 4 years and fined N100,000 for breach of rule 1(III) of the code of conduct for capital market operators and their employees.

    Victor Obire got three years ban from capital market activities and was fined N100,000 for breach of rule 1(III) of the code of conduct for capital market operators and their employees. Nkechi Azubuike, Adekule Alli, Mohan Lalchandani, Anthony Nwozor and Oluwo Oluwale W were all banned for one year and fined N 100,000 for breach of rule 1(III) of the code of conduct for capital market operators and their employees.

    Ande Ewubare, Victor Inyang, Hilary Eludu, Ehime Alofoje and Ofem Mbui Omni bagged two years ban from capital market activities and were fine N100, 000 for breach of rule 1(III) of the code of conduct for capital market operators and their employees. Joshua Sesan Adetiloye was banned for one year from capital market activities with no fine.

     

  • SEC urges collaboration on infractions in Capital Market

    The Securities and Exchange Commission (SEC) has urged law enforcement agencies to collaborate with the Commission in its quest to ensure zero tolerance on infractions in Nigeria’s Capital Market and also ensure that perpetrators of fraudulent acts are brought to book appropriately.

    Director General of SEC, Mounir Gwarzo stated this when he led members of the Management of the Commission on a visit to the Inspector General of Police, Solomon Arase in his office in Abuja, Monday.

    A statement from the SEC Monday said “Gwarzo solicited the support of the IGP to enhance the ongoing co-operation between the Force and the Commission towards ensuring that laid down rules and procedures are adhered to in the capital market.”

    Some of these infractions include fraudulent disposal of investor assets, illegal fund management, wonder banks, insider dealing, corporate accounting fraud and share manipulation etc.

    Despite the great successes with tracking fraudulent practices in the market, the Commission is not resting on its laurels as there are still illegal fund managers, wonder banks and possible cases of market abuse. It is hoped that this synergy with the police will help to significantly reduce, if not totally eradicate these activities to the benefit of investing public.

    He appreciated the police on the work they have been doing since the collaboration started and sought for more in areas of specialized discipline such as forensic investigation to enhance the operations of the Capital Market.

    In his response, IGP Arase assured the Commission that the Nigerian Police under his leadership will do all that it can to assist the Commission in ensuring that incidents of infractions within the Capital Market are brought to the barest minimum.

    He said the inter agency collaboration is in the right direction as both Nigeria Police, Economic and Financial Crimes Commission, EFCC, and SEC are committed to deliver mandate of protecting life and property of the  people adding that the administration will deal with anybody found defrauding the people in the capital market.

    The Investment and Securities Act of 2007, section 304 requires the Commission to refer matters of criminal nature to the appropriate criminal prosecuting authorities including the Nigeria Police.

    Before now, the police had deployed 18 policemen to SEC to prosecute criminal cases involving capital market activities and ensure that every culprit found wanting is dealt with in accordance with the Investment and Securities Act and laid down regulation.

     

  • How SEC is unlocking capital market potential

    How SEC is unlocking capital market potential

    The Securities and Exchange Commission (SEC) understands that Nigerian capital market has amazing potential to serve as a catalyst for getting more people into the financial services industry.

    From financial inclusion projects, deepening non-interest finance plans, campaign on e-dividend; push to get power companies and telecom firms listed on the Nigerian Stock Exchange are initiatives initiated by SEC Director-General, Mounir Gwarzo to unlock Nigeria’s economic potentials and create wealth for the people.

    Gwarzo believes that the potentials of the Nigerian financial market are enormous and have to be unlocked early to create wealth for the nation.  The SEC boss is therefore implementing key policy initiatives meant to deepen the Nigeria financial market, secure investors’ confidence and drive investment with new technologies.

    Like the Central Bank of Nigeria (CBN), SEC under its new leadership is aware of the impact of bringing more people into the financial market net and creating seamless dealing platforms that raise confidence level in the market. These policies are not only sustaining investors’ interest, but deepening the financial market.

    The e-dividend management system, which was launched last year by the SEC in collaboration with the CBN and the Nigeria Interbank Settlement System (NIBSS) to enable investors have direct access to their dividends are already enjoying some level of compliance from the investing public.

    For Gwarzo, the commission’s concern was to bring back retail investors to the nation’s capital market confident that in the next 10 years, SEC would raise the participation of the retail investors to 45 per cent from less than two per cent presently.

    He is also aware of the benefits of attracting cheap funds into the financial market and getting key sectors of the economy including power, telecom, oil and gas listed on the local bourse as such practice would not only create more tax net for the country, but serve as engine room for economic development.

    The SEC boss has said the Nigerian capital market has amazing potential to serve as a catalyst for financial inclusion. While most people identify capital markets as important sources of medium-to-long term capital, few realise their amazing potential to serve as catalysts for bringing so many people into the financial services sector in the interest of the economy.

    SEC is determined to unlock this potential of the Nigerian capital market. In particular, we are aware of the need to deepen the non-interest capital market space. This is to enable millions of Nigerians and people of faith to invest savings ethically. Investors worldwide are increasingly allocating their resources into Islamic finance products.

    The SEC boss also has interest in deepening the non-interest banking segment of the economy. Statistics show that total assets under management in the global Islamic finance industry had surpassed $2 trillion (N394 trillion) by the end of 2014. The global sukuk market continued to witness remarkable growth since after the 2008 global financial crisis with annual issuances growing from $15 billion in 2008 to almost $120 billion in 2014 and Nigeria should key into it.

    Last year is widely considered a landmark year for Islamic finance, especially with debut sukuk issuances by countries such as the United Kingdom, Hong Kong, Senegal, South Africa, and Luxemburg. There is no doubt that the sukuk market is emerging on a global scale as a viable alternative source of funding.

    In Nigeria, SEC has implemented a number of reforms aimed at deepening the non-interest capital market. The Commission focused on the regulatory framework, reviewing the Rules and introducing new ones.

    It has issued rules on Islamic Fund Management as well as rules on Sukuk issuance. These two legal frameworks have encouraged Islamic product innovation with the registration of five ethical/Shariah compliant funds and the issuance of Nigeria’s first ever sub-national Ijara Sukuk by the Osun State government in 2013 which was oversubscribed. It is also considering modalities for setting up a Sharia Advisory Council as a body of experts to advise SEC and the market on non-interest product and their applications.

    SEC is also, closely with the Debt Management Office (DMO) to ensure Nigeria issues her first sovereign sukuk that will provide the needed benchmark for other categories of issuers.

    Besides, deposits from non-interest banking could be deployed into infrastructure funding and other developmental projects as Nigeria remains a huge market for non-interest banking given its large population base.

    Aside need to deepen Islamic finance market, the SEC is absorbing the cost of e-dividend registration for investors that register on time. The commission has achieved over 4,000 per cent growth in the number of investors that registered to have access to their dividends in recent months.

    The e-Dividend management system was meant to enable investors have direct access to their dividends. The Commission has also embarked on various initiatives like e-Dividend, Direct Cash Settlement, National Investors Protection Fund (NIPF) among others to attract retail investors to the market.

    The need to deepen the market is key. For instance, Nigeria has less than two per cent participation of retail investors in our market. Malaysia has nine per cent, South Africa 19 per cent, United States of America 43 per cent, and United Kingdom 13 per cent. So, retail investors are yet to fully key into the Nigeria market and the dominance of the foreign investors means that anytime they move out of the market, the market goes down. SEC, under Gwarzo, is therefore ensuring that in the next five to10 years, the level of involvement of the retail investor is raised to at least, five per cent.

    The SEC is also leading moves to get the power generation and distribution companies, and telecommunications firms operating in the country quoted on the Nigerian Stock Exchange and/or the NASD OTC securities market. The continued absence of the companies from the NSE and NASD is making the country to lose huge revenue through taxation.

    The very high percentage of taxes paid to the government comes from quoted firms. It is, therefore, in the interest of the country that these companies and more are listed on these markets.

    The SEC D-G insists that listing by the firms would give the capital market the required depth to drive economic growth for the country.

    The SEC, CBN and other stakeholders are already addressing regulatory gaps and market structures hindering financial inclusion for the unbanked Nigerians. Having an account or financial wallet is the first step for the poor unbanked population to move out of poverty line and any policy that discourages this step is distasteful.

    Banks and government are expected to avoid any steps that would discourage the poor Nigerians from embracing banking services.

    The SEC under Gwarzo is already ensuring that all people, especially those with the fewest resources have access to the opportunities they need to succeed in life by investing in the capital market. He believes that financial inclusion is a key driver for economic development and growth even as access to financial services improves the lives of the poor.

    The achievements of Gwarzo within a short time of taking over the leadership of SEC, have earned him several recognitions.

    He has in March this year, unanimously re-elected to continue providing leadership to the Africa Middle East Regional Committee (AMERC) of the International Organization of Securities Commissions (IOSCO) as its Chairman. The AMERC comprises securities regulators who are IOSCO members within the Middle East and North Africa as well as sub-Saharan African regions. He would serve for another term of two years.

    Gwarzo’s reelection is a clear testament to Nigeria’s growing influence and improved image in the international community, but also a strong indication of the overwhelming support he enjoys among peer regulators following a very successful first tenure.

    It would be recalled that in February 2015 members of the regional body elected Gwarzo as Chairman of AMERC during their 34th annual meeting in Muscat, Oman to complete the outstanding term of his predecessor. Upon his election, he had outlined to members his agenda for the regional committee pledging to focus on advancing issues that improve voice, visibility and inclusiveness for African/Middle Eastern markets while working towards more cooperation, especially to boost capacity building and cooperation.

    This agenda aims to tackle three major challenges facing the frontier and emerging markets within the AMERC region which are dearth of capacity, inadequate visibility and poor level of integration. By this unanimous reelection, members have expressed desire to see Gwarzo continue to lead the Committee to keep addressing these challenges. For example, AMERC members had for years been yearning for the inclusion of Arabic as one of the official languages of IOSCO since about 50 per cent of the member countries within the AMERC region are Arabic-speaking nations.

    Knowing that adopting Arabic will engender greater visibility and participation in IOSCO’s decision-making, Gwarzo promised to vigorously advocate its adoption by the IOSCO Board. He persuasively argued on the importance of the systemically important Arabic-speaking member jurisdictions who regulate capital markets worth trillions of dollars in combined capitalization.

    His argument has been effective as the IOSCO Board recently considered and approved the adoption of Arabic as one of its official languages, a decision that pleases countries like Saudi Arabia and the UAE but also elevates the inroads non-interest finance could begin to have on the global financial system.

    In the area of capacity building, Gwarzo’s tenure has been even more remarkable. He has championed ideas within the IOSCO Board that will enhance the capacity of AMERC markets, especially tapping from their more developed counterparts in Asia, Europe and North America. Three notable ideas are already being implemented by IOSCO and will certainly be critical to addressing capacity gaps, particularly in frontier markets within the AMERC region. They are the establishment of regional hubs, the roll out of an online toolkit and commencement of a global certificate programme.

    In fact, Mr. Gwarzo was chosen by the IOSCO Board to lead the first effort by facilitating the setting up of a pilot regional hub for capacity building for the AMERC region. The hub will be domiciled in Dubai, an internationally accessible travel destination. It will integrate a tailored program of regionally focused workshops, seminars and conferences to be delivered by experienced regulators and members of the academia. The hub will deliver an exceptional platform for members to exchange expertise, experience and knowledge. Considering the resource limitations facing African countries, Gwarzo has advocated for scholarships within the design, sponsored by IOSCO, to subsidize the programmes so that countries are able to enhance their capacity within a modest budget.

    The second idea, creating an online toolkit, aims to leverage technology to make information and knowledge sharing among regulators as seamless as possible. It will be a rich bank of data, information and resources from which regulators can frequently tap in their day-to-day operations. This is particularly useful for emerging market jurisdictions that require more resources to achieve capacity building tools as the toolkit comes in handy and at no cost. In addition to these efforts, Gwarzo has focused on partnering with fellow IOSCO members within sub-Saharan Africa to benefit from capacity building programmes of bigger markets such as Nigeria.

    Prior to Gwarzo’s first election, West Africa was the least integrated capital market of all other sub-regions within AMERC. Following discussions with counterparts from Ghana and the francophone West Africa, Gwarzo hosted in Abuja, discussions which led to the establishment of the West African Securities Regulators Association (WASRA).

    Gwarzo has indeed remained a vibrant voice in the Nigeria as well as regional market integration and development.

     

    • Ume is a Financial Analyst based in Abuja

          

     

  • SEC extends capital market operators’ recapitalisation deadline

    SEC extends capital market operators’ recapitalisation deadline

    The Securities and Exchange Commission (SEC) has granted an extended window of 15 months to operators that failed to meet the initial recapitalisation deadline on the new minimum capital requirements.

    Director-General, Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, at a briefing in Lagos on the deliberations at the Capital Market Committee (CMC), said capital market operators that were unable to meet the September 30, 2015 initial deadline for new capital requirements have been given a 15-month grace.

    Also, operators who were disqualified for non-compliance or inability to substantiate claims of compliance by the audit firms will be allowed to come back to the market once they show evidence of compliance within the stipulated period.

    “We have given a grace of about 15 months from the initial deadline of September 30, 2015 to December 31, 2016. Operators who did not meet the requirement within this period will have their operating licence cancelled” Gwarzo said.

    SEC in December 2013 announced major increases in minimum capital requirements for capital market functions under a new minimum capital structure that was initially scheduled to take off by January 1, 2015. It, however, extended the deadline to September 30, 2015.

    Minimum capital base for broker/dealer was increased by 329 per cent from the existing N70 million to N300 million. Broker, which currently operates with capital base of N40 million, will now be required to have N200 million, representing an increase of 400 per cent. Minimum capital base for dealer increased by 233 per cent from N30 million to N100 million.

    Also, issuing houses, which facilitate new issues in the primary market, will be required to have minimum capital base of N200 million as against the current capital base of N150 million. The capital requirement for underwriter also doubled from N100 million to N200 million. Trustees, rating agencies and portfolio and fund managers had their minimum capital base increased by 650 per cent each from N40 million, N20 million and N20 million to N300 million, N150 million and N150 million respectively. A  registrar will now have a minimum capital base of N150 million as against the current requirement of N50 million.

    While the minimum capital base for corporate investment adviser remained unchanged at N5 million, individual investment advisers will have to increase their capital base by 300 per cent from N500,000 to N2 million.

     

  • SEC extends capital market operators’ recapitalisation deadline to Dec 2016

    SEC extends capital market operators’ recapitalisation deadline to Dec 2016

    •Investors get 150 additional days for free e-dividend registration

    The Securities and Exchange Commission (SEC), Nigeria’s apex capital market regulator, has granted an extended window of 15 months to capital market operators that failed to meet initial recapitalisation deadline to comply with the new minimum capital requirements for their functions.

    Director General, Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, at a briefing yesterday in Lagos on the deliberations at the Capital Market Committee (CMC), said capital market operators that were unable to meet the September 30, 2015 initial deadline for new capital requirements have been given a 15-month grace to recapitalise.

    Also, operators who were disqualified for non-compliance or inability to substantiate claims of compliance by the audit firms will be allowed to come back to the market once they show evidence of compliance within the stipulated period.

    “We have given a grace of about 15 months from the initial deadline of September 30, 2015 to December 31, 2016. Operators who did not meet the requirement within this period will have their operating license cancelled” Gwarzo said.

    SEC had in December 2013 announced major increases in minimum capital requirements for capital market functions under a new minimum capital structure that was initially scheduled to take off by January 1, 2015. It however extended the deadline to September 30, 2015.

    Minimum capital base for broker/dealer was increased by 329 per cent from the existing N70 million to N300 million. Broker, which currently operates with capital base of N40 million, will now be required to have N200 million, representing an increase of 400 per cent. Minimum capital base for dealer increased by 233 per cent from N30 million to N100 million.

    Also, issuing houses, which facilitate new issues in the primary market, will now be required to have minimum capital base of N200 million as against the current capital base of N150 million. The capital requirement for underwriter also doubled from N100 million to N200 million. Trustees, rating agencies and portfolio and fund managers had their minimum capital base increased by 650 per cent each from N40 million, N20 million and N20 million to N300 million, N150 million and N150 million respectively. A  Registrar will now have a minimum capital base of N150 million as against the current requirement of N50 million. While the minimum capital base for corporate investment adviser remained unchanged at N5 million, individual investment advisers will have to increase their capital base by 300 per cent from N500,000 to N2 million.

    Gwarzo said SEC has also decided to extend the deadline for free e-dividend registration by 150 days.

    He said SEC would bear the cost of registration on behalf of any investor who registered within the 150 days grace period noting that at the expiration of the grace period, subsequent registration of an investor would attract a fee of N100.

    He noted that the e-dividend management system which was launched last year by the Commission in collaboration with the Central Bank of Nigeria (CBN) and Nigeria Interbank Settlement System (NIBSS) to enable investors have direct access to their dividends has enjoyed high level of compliance from the investing public.

  • SEC, shareholders row over shares manipulations

    SEC, shareholders row over shares manipulations

    Shareholders yesterday disagreed with the Securities and  Exchange Commission (SEC) over the cause of the downward trend in the stock market with attendant negative consequences on the economy.

    The stakeholders expressed divergent views even as the House of Representatives Committee on Capital Markets and Institutions, headed by Hon. Tajudeen Yusuf began a two- day public hearing on two motions titled: Downward trend of the Nigerian Stock Exchange and urgent need to address the vexed issue of unclaimed dividends.

    The President of the Renaissance Shareholders Association, Ambassador Olufemi Timothy, who fired the first shot at the hearing, said the Nigerian Stock Exchange (NSE) has lost Integrity because of shares manipulation  and other illegalities.

    He wondered how the shares of dead companies kept rising in the Exchange while that of healthy and vibrant companies were static or degraded.

    On the post-2008 downward trend of the stock exchange till date, he said: “We investors ( retail, institutions) have discovered that the NSE has turned into something else, hence the continued downward trend of the market without being able to recover for eight years, since 2008.

    “Our stock market from our experience as retail investors for two decades now was that the NSE has been turned into gambling centre (Casino Game Market).

  • SEC to deepen non-interest bond market to boost national growth

    THE securities and Exchange Commission (SEC) is considering additional regulatory initiatives to strengthen Nigeria’s non-interest bond market to provide alternative financing sources to governments and additional investment opportunities for investors.

    Its Director-General Mr. Mounir Gwarzo said the capital market regulator was aware of the need to deepen the non-interest capital market segment to enable millions of Nigerians and people of faith invest their savings ethically.

    He said globally, investors were  allocating their resources into Islamic finance products, noting that Sukuk bond, one of the most important components of the Islamic financial system, can provide state governments with funds to implement their developmental agenda.

    According to him, while most people identify the capital market as an important source of medium-to-long term capital, few actually realise its amazing potential to serve as a catalyst for financial inclusion.

    “SEC is determined to unlock this potential of the Nigerian capital market,” Gwarzo said.

    The Commission has implemented some reforms aimed at deepening the non-interest capital market. They include review of the regulatory framework for the non-interest segment and issuance of rules on Islamic fund management as well as rules on Sukuk issuance.

    Gwarzo pointed out that the Islamic fund management and Sukuk rules have encouraged Islamic product innovation with the registration of five ethical and Shariah-compliant funds and the issuance of Nigeria’s first-ever sub-national Ijara Sukuk by the Osun State government in 2013, which was oversubscribed.

    “We are also considering modalities for setting up a Sharia Advisory Council as a body of experts to advise SEC and the market on non-interest product and their applications,” Gwarzo said.

    Speaking at a roundtable on the non-interest capital market organised by the SEC in Sokoto, the Sokoto State capital, Gwarzo said state governments could leverage on the Sukuk market to raise funds for developmental projects.

    He added that henceforth the focus of SEC would be on massive public enlightenment and also stronger capacity building initiatives.

    He said the Commission had been working with the Debt Management Office (DMO) to ensure that Nigeria issues her first sovereign Sukuk that would provide the needed benchmark for other categories of issuers.

    He expressed optimism that there would be a significant progress on the issuance of Nigeria’s sovereign Sukuk in the year.

    Sokoto State Governor Aminu Tambuwal said the government had since resolved to embrace Sukuk.

    Represented by the state Commissioner for Finance, Alhaji Sa’idu Umar, the governor said Islamic capital system conforms with the religious and cultural beliefs of the people of the state.

    Tambuwal said the system provides alternative sources of funds, especially in view of the dwindling revenues caused by the falling global oil resources.

    Zamfara State Governor, Alhaji Abdulazeez Yari, who was represented by Alhaji Shehu Baraya, the state’s Acting Accountant-General, urged Nigerians to embrace Islamic capital for national development.

    The Sultan of Sokoto, Alhaji Sa’ad Abubakar, represented by the Emir of Gwandu, Alhaji Ilyasu Bashar, commended the commission for organising the roundtable.

    Abubakar said Sukuk provided alternative sources of funds for the development of the nation.

    Total assets under management in the global Islamic finance industry had surpassed $2 trillion by the end of 2014 as the global Sukuk market continues to witness remarkable growth since after the 2008 global financial crisis.

    Annual issuances have grown from $15 billion in 2008 to almost $120 billion in 2014; 2015 was considered a landmark  for Islamic finance, especially with debut Sukuk issuances by the United Kingdom, Hong Kong, Senegal, South Africa and Luxemburg.

    The year also witnessed continued strong interest from key markets of Malaysia, Saudi Arabia and the United Arab Emirates (UAE) and emerging markets, such as Turkey and Indonesia. There is no doubt that the sukuk market is emerging on a global scale as a viable alternative source of funding.

  • ‘SEC’s income cannot cover 50% of its cost’

    ‘SEC’s income cannot cover 50% of its cost’

    The Securities and Exchnage Commission (SEC) has lamented that what it generates from the market cannot cover 50 per cent of its cost.

    Addressing members of the House of Representatives Committee on Capital Market yesterday in Abuja, its Director-General, Mr Munir Gwarzo also expressed concerns that the Treasury Single Account (TSA) has greatly reduced the capital market regulator’s ability to be flexible.

    “What we generate from the market cannot cover more than 50 per cent of our cost, so, more often we have to dip into that fund (funds saved by past SEC administrations) but now with the TSA and other things, that flexibility is being cut off because some of the interest income that we derive from those investment, we don’t enjoy them any longer,” he lamented.

    Gwarzo told the legislators SEC is now “running a very tight budget, given that the market has gone down and given that there are aspirations to move the market up. We have to set aside some amount of money.”

    The SEC chief also disclosed that for “the budget of 2015, we had projection of N6.9 billion as our income but we were only able to make N4.9 billion because of the state of the market. We no longer take our staff on overseas and local training and our earnings are now 30-40 per cent less than we had in the past.”

    SEC also said it aims to attract more retail investors into the capital market to deepen and develop the market.

    Gwarzo said: “As a country we have only less than two per cent participation of retail investors in our market. Malaysia has nine per cent, South Africa  19 per cent, US 43 per cent, and UK-13 per cent. So our market is less being participated by the retail investors. Due to the dominance of foreign investors, anytime they move out of the market, the market goes down. Our effort is to see that in the next five to 10 years we raise the level of involvement of the retail investor to at least five per cent.”

    According to him,  has been drumming the need for government to intervene in getting investors to list in the capital market.

  • Nigeria sets up committee on sukuk

    Nigeria sets up committee on sukuk

    The Federal Government has set up a committee to advise on issuing the country’s first sovereign sukuk, the Securities and Exchange Commission (SEC) said on Thursday, citing the need to explore alternative funding sources.

    Nigeria plans to borrow as much as $5 billion to help fund a budget deficit worsened by the slump in oil prices that has slashed revenues and weakened the naira, Reuters reported.

    SEC spokesman, Nalf Abdusalam, said the new committee, including officials from the Debt Management Office (DMO), would advise on the amount to be raised, the timing and jurisdiction of the issue.

    “Any time from the first week of March, the committee is expected to submit its report,” he said.

    Islamic banking assets globally now exceed $1 trillion and could reach $4 trillion by 2020, analysts said.

    Nigeria has asked the African Development Bank for a $1 billion budget support loan and has held “explanatory talks” with the World Bank.

    Issuance of a sovereign sukuk is part of a strategic plan developed by the DMO three years ago to develop alternative sources of funding and to establish a benchmark curve for corporates to follow.

  • Banks threaten e-dividend registration, says SEC

    Banks threaten e-dividend registration, says SEC

    THE Securities and Exchange Commission (SEC) has raised the alarm that banks are threatening the success of the e-dividend registration launched to have unclaimed dividends paid to investors.

    It was gathered that the SEC has evidence that some banks were charging as high as N1,050 to stamp and sign the e-dividend forms that would allow investors migrate from the old dividend warrant practice to e-dividend platform.

    Investors have 30 days to migrate to the e-dividend platform for free starting from December last year.

    An official of SEC told The Nation that the SEC reported the matter to the Central Bank of Nigeria (CBN) last week when stakeholders on the e-dividend met.

    The SEC official confirmed that the CBN has offered to raise the issue at the next Bankers’ Committee meeting to make the banks comply with the free registration period. The official, who pleaded not to be named, lamented that the activities of these banks posed a threat to the desire to have unclaimed dividends paid to their rightful owners.

    As a first step to check the “unscrupulous activities of banks”, the SEC official disclosed that the free registration period for the e-dividend exercise has been extended by 30 days so instead of free registration period ending in March, it will now end in April, this year.

    It was revealed last month that there is in excess of N90 billion in unclaimed dividends sitting in the bank accounts of quoted companies which ordinarily should have been paid to investors.

    The SEC official noted that investors were being short changed but both quoted companies and their registrars who use the 15-month grace period that unclaimed dividends are allowed to be with registrars before such monies are returned to the companies.

    Some of the big registrar outfits are owned by big quoted companies, particularly banks. According to the SEC official, “some of these companies own the registrar companies they use to drive their public offers. The registrars are allowed to hold on to dividends declared at the end of annual general meetings for 15 months and those dividends that are not redeemed wishing that period revert to the companies resulting in unclaimed dividends.”

    The SEC official accused many quoted companies of working with their registrars “to perpetuate the unclaimed dividends syndrome with a peculiar Nigerian twist”.

    Apart from the prompt remittance of declared dividends into the accounts of registered investors, the e-dividend platform will allow investors who desire to sell all or part of their shares to be paid immediately the shares are sold instead of the old practice where registrars hold on to the proceeds of sold shares for weeks and months before the investors can get his money.

    The SEC began its e-dividend registration campaign in January 2016 in Abuja with road shows and a town hall meeting. The Commission will bring the campaign to Lagos this week ostensibly to sensitize the large investor population of Lagos not only of the benefits of the e-dividends registration but to resist any attempt by banks to charge any fees for the registration before April after which banks are allowed to charge only N100 for the registration.