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Tag: SEC

  • SEC, stakeholders to brainstorm on capital market financing

    SEC, stakeholders to brainstorm on capital market financing

    The Securities and Exchange Commission has said it will collaborate with the National Planning Commission to host an infrastructure roundtable aimed at finding remedy for Nigeria’s inadequate infrastructural stock.

    A statement by the Communications Adviser to the Director-General, SEC, Obi Adindu, said the roundtable would highlight the role of the capital market in Nigeria’s development and how to raise $360bn needed to solve the infrastructural deficit.

    According to the statement, the roundtable, scheduled to take place from August 5 to 6 in Lagos, will involve professionals from the public and private sectors.

    The Director-General, SEC, Ms. Arunma Oteh; the Minister of National Planning, Dr. Shamsudeen Usman; the Minister of Works, Mr. Mike Onolememen; the Minister of Transport, Senator Idris Umar; the Minister of Housing and Urban Development, Ms. Ama Pepple, and the Director-General, Bureau for Public Enterprises, Mr. Benjamin Dikki, as well as the Lagos State Commissioner for Economic Planning, Mr. Ben Akabueze, are all expected to speak at the event.

    While Usman will present the National infrastructure master plan at the event, the roundtable is also expected to witness a review of comparative global trends in resolving infrastructure challenge.

    The statement read in part, “The relevance of the capital markets in providing sustainable funding for the infrastructure needs which would have been given definition by the infrastructure ministers will be examined by a panel featuring largely principal officers of multilateral financial institutions such as the African Development Bank and International Finance Corporation.

    “Participants on this panel will include a representative each of the Rand Merchant Bank, Infrastructure Concessions Regulatory Commission, ARM Infrastructure Fund and Perchstone and Gray, an infrastructure finance specialist law firm.”

    In addition to this, capital market operators are also scheduled to discuss climatic and environmental factors which would encourage investment in infrastructure.

    The SEC added that the event would review legal issues and structuring and financing options.

  • Investment One eyes one-stop investment services

    The regulatory regime of the Central Bank of Nigeria (CBN) that redirected Nigerian deposit money banks to core banking activities created challenges and opportunities.

    CBN’s Scope of Banking Activities and Ancillary Matters No 3, 2010 requires banks to fully concentrate on core banking functions. It requires banks to either sell non-core banking businesses or form a holding company to hold such non-core banking businesses including activities such as insurance, asset management and capital market operations.

    Most banks, including Access Bank Plc, Diamond Bank Plc, Fidelity Bank Plc, Guaranty Trust Bank (GTB) Plc, Skye Bank Plc, Sterling Bank, Zenith Bank, Unity Bank and Wema Bank chose to divest from non-banking subsidiaries. Five banks including First City Monument Bank (FCMB) Plc, First Bank of Nigeria (FBN) Plc, Stanbic IBTC Bank Plc, United Bank for Africa (UBA) Plc and Union Bank of Nigeria (UBN) Plc have adopted the holding company structure, which separates core banking entity from other entities as subsidiaries under a single holding company.

    Altogether, restructuring banks have had to divest from about 80 subsidiaries. The challenges of such massive restructuring included divestments, spin-offs, changes in boards and shareholdings, delisting, listing, relisting, new strategic business plan, rebranding and several other anxious concerns that come with divestment, acquisitions and mergers. The new regime meanwhile created several opportunities too including new investments, prospects of improved professionalism, improved corporate governance and more importantly, financial sectors’ stability.

    However, the main challenge is ironically the main opportunity for the newly divested entities-standing alone after several years of group structure and comfort. For thriving erstwhile subsidiaries, the divestment was an opportunity to scale up and ‘live their visions’. But for others, it was a change too hard to muster.

    Investment One Financial Services Limited, the emergent company from the sale of erstwhile GTB Asset Management Limited (GTBAM), knows the challenges but rather sees opportunities in the changing landscape of investment services. With eyes on gains and the future of the new entity, GTBank had opted for management buy out (MBO) as divestment vehicle for GTBAM. Investment One is now owned by management and staff of the company and few select investors that share the philosophies of excellence and service that form the core values of GTBank and its former subsidiaries, the pedigree upon which Investment One is building on.

    With three acquisitions, three high-profile approvals for new functions and many awards in the past 12 months, Investment One is arguably the fastest growing investment company. In the latest acquisition, regulatory filing showed Investment One has acquired 99.9 per cent equity stake in Kakawa Asset Management Ltd (KAML), a former subsidiary of Kakawa Discount House Limited. The new acquisition brought with it complementary investment management expertise and products. Established in June 2004, KAML is registered by Securities and Exchange Commission (SEC) as a corporate investment adviser and fund manager and it is also dealing member and stockbroking firm at the Nigerian Stock Exchange (NSE). Over the years, it has established a niche as a bespoke provider of investment solutions and shared a common pedigree with Investment One through its affiliation to GTBank.

    The acquisition of KAML brought its Kakawa Guaranteed Income Fund (KGIF) into the portfolio of bespoke investment products under Investment One. KGIF is a premium unit trust scheme that delivers minimum return indexed to CBN’s Monetary Policy Rate (MPR), currently 12 per cent, and it makes dividend payment twice a year. Besides, a potential investor can earn additional return of 35 per cent of the net income of the fund. Investors can also use their funds in KGIF as collateral to borrow loans, finance children education and bequeath assets to children. The combined assets of Investment One and KAML amount to more than N50 billion in funds under management.

    Earlier, Investment One had acquired fund and management rights the Nigerian International Growth Fund (NIGFUND), a mutual fund of over N3billion, from Fidelity Bank Plc.

    Last month, it added Royal Trust Pension Fund Administrators Limited (RTPFA) as one of its subsidiaries following acquisition of 99.9 per cent shareholdings in the pension fund administrator. RTPFA already looks forward tom leveraging on the scale and expertise to enhance its profile in the pension industry. Managing Director, Royal Trust Pension Fund Administrators Limited (RTPFA), Mr Charles Sanni being a part of Investment One would enable the company to offer world-class products and services to its clients.

    According to him, RTPFA would leverage on Investment One’s core values of market insight, innovation and service excellence to achieve its vision of being Nigeria’s foremost pension manager.

    Besides the many acquisitions, Investment One’s stockbroking subsidiary, Investment one Stockbrokers International Limited has secured three high-profile additional functions at the stock market. It was appointed as one of the six Fixed Income Market Makers (FIMMs), companies that will provide two-way quotes for the sale and purchase of government and corporate bonds on the NSE to retail investors who do not meet the N100 million per transaction volume requirements of Primary Dealers-Market Makers (PDMMs). PDMMs deal mostly with banks and discount houses. It was also appointed as one of the 12 Supplementary Equity Market Makers (SMMs). Investment One Stockbrokers will provide two-way quotes and regular liquidity to a basket of 10 stocks including United Bank for Africa (UBA), Access Bank, Zenith Bank, Flour Mills of Nigeria, Mansard Insurance, Julius Berger, May and Baker Nigeria, CAP Plc, Total Nigeria and Red Star Express Plc.

    Investment One Stockbrokers was also recently appointed as one of the 14 Designated Advisers (DAs) for emerging stocks at the stock market. With this appointment, the company will act as advisers to companies listed on the Alternative Securities Market (ASeM) of the NSE. ASeM is primarily a vehicle to provide amenable access to capital for small and medium enterprises with good prospects, but still immature for the more rigorous requirements of the main board at the NSE. Investment One Stockbrokers’ arrays of new functions further confirmed its profile as one of the main market-driving stockbroking firms. It had emerged as one of the top 10 stockbroking firms by volume and value on the NSE in 2012.

    Besides immediate strategic positioning, Investment One recognises the importance of growing Nigeria’s investors’ base. It has launched a SEC-approved online investment education platform, Virtual Investment Simulator, which encouraged participants to learn about how to make informed investment decisions as well as enhance knowledge of the financial market. It allows investors to form exclusive investment clubs within the portal whereby participants can invite friends and colleagues to join, compete with one another as well as share ideas and post comments on the portal’s blog page. It had recently presented N500, 000 as star prize to the pioneer winner of the simulated investment game.

    With all these, Investment One was recently recognized as one of top 50 Fast Growing Companies in Nigeria. It was one of the three financial Sector companies recognised in the award category, which took into consideration the awardees’ growth rate of not less than 100 per cent per annum, employment of more than 6,500 people, business spread and business incubation records.

    The acquisitions and new functions, coupled with aggressive corporate development initiatives, have broadened Investment One’s one-stop investment services vision. Primarily licenced by the NSE and SEC to provide a wide portfolio of capital market services including investment management, trusteeship, issuing house, financial advisory and securities brokerage, additional functions and subsidiaries would enable Investment One to provide individual and institutional investors a holistic investment experience.

    Speaking recently, managing director, Investment One, Mr. Nicholas Nyamali, said the name ‘Investment One’ mirrors the company’s desire to be a one-stop shop for comprehensive investment services and the first point of call for insightful and innovative financial solutions.

    According to him, the name also reflects the firms’ strategic positioning as a service-oriented firm that is responsive to the investment needs of its customers while its payoff-forward thinking investment solutions, underscores its commitment to delivering financial services solutions backed by its long-standing core values of service excellence, innovation and market insight to individual and institutional investors.

    “The company is uniquely positioned to provide comprehensive services to meet our customers’ investment requirements. Whether to advise, execute, manage or transfer wealth to future generations, our customers will find the full compliments of investment solutions in our one-shop location – we call this the 360° Investment Partnership,” Nyamali said.

    According to him, the company is reputed for its ability to discover and generate new ideas to meet the diverse needs of its clients with a wide array of products and services including local and offshore equities and fixed income securities as well as alternative investment such as real estate securities, commodities and derivatives.

    “Our primary objective in meeting clients’ expectations is built upon three service benchmarks- execution, performance and efficient reporting. We execute clients’ mandates speedily and generate regular market reports that serve to update our clients about the status of their transactions,” Nyamali noted.

    With all these, Investment One appears to be well-positioned in the competition-driven realignments of operators and products and services in the Nigerian capital market.

     

  • NASD to trade in private placements, delisted securities

    The NASD – the over-the-counter (OTC) trading platform for unquoted securities such as equities and bonds, whichstarted trading yesterday, would trade in all securities including shares that were issued through private placements and unlisted public offerings.

    The NASD would also offer trading platform for shares of companies who voluntarily delisted their shares or were compulsorily delisted by the Nigerian Stock Exchange (NSE).

    The Nation gathered that the OTC said it would create a liquid and transparent secondary market for shares in private limited liability companies and public limited liabilities companies which had balked at listing on the NSE after initial promises of listing.

    During the 2005-2008 market boom, several private limited liability companies had converted to public limited liability companies, and floated IPOs to raise funds from the capital market with assurances that they would list their shares after the conclusion of the offer. While some have listed, many companies that floated IPOs have backed down from listing their shares.

    Retail investors have said the non-listing of the shares of the companies, which had undertaken IPOs during the stock market boom have locked down their funds without any verifiable means of accessing such funds.

    Shareholders said the non-listing of the shares was a breach of agreement, noting that this has not only denied them the opportunity of knowing the current worth of their investments but they have also been unable to retrieve their funds.

    National President, Nigeria Shareholders Solidarity Association (NSSA), Chief Timothy Adesiyan, noted that several shareholders were lured into buying the IPOs due to the promise of public listing and resultant opportunity to trade on their investments.

    According to him, it was unbecoming of the companies to raise funds from investors and refuse to subject themselves to public scrutiny by listing their shares.

    Investors also have some N300 billion stuck in several delisted companies. The NSE had delisted not less than 44 companies since 2009 largely due to failure to meet listing requirements for the main board. Many companies had however opted for voluntary delisting including Nigerian Bottling Company (NBC).

    The NSE had in several batches invoked compulsory delisting to clear what it considered as irredeemably inactive companies. Some of the delisted companies included Okitipupa Oil Palm, Grommac Industries, Incar Nigeria, Intra Motor, Rietzcot Nigeria, Albarka Air, Aviation Development Company, Ceramic Manufacturers Nigeria, Wiggins Teape Nigeria, Onwuka Hi-Tek, Beverages West Africa, Ferdinand Oil, Foremost Diaries, Tate Industries, Footwear and Accessories Manufacturers, Aboseldehyde Laboratories, BCN, Christlieb and Maureen Laboratories.

    Others included Epic Dynamics, Liz-Olofin and Company, Nigerian Lamps Industries, Niyamco, Oluwa Glass Company, West Africa Glass Industtry, Aba Textile Mills, Asaba Textile Mill, Enpee Industries, Flexible packaging, Krabo, NewPak, Nigercem and Tropical Petroleum.

    Most of the companies had attracted substantial secondary market values in spite of absence of fundamental figures to back their operations.

    Formerly known as the National Association of Securities Dealers, NASD Plc is a registered over-the-counter (OTC) trading platform for unquoted securities including equities and bonds. NASD is owned by several investment and financial institutions as well as strategic investors. NASD is registered by the Securities and Exchange Commission (SEC) as an organised trading platform for unlisted securities.

    Speaking on the immense potential of the OTC market, managing director, NASD Plc, Mr. Bola Ajomale, said the emergence of NASD would give investors the opportunity to buy and sell unquoted securities in an organised and transparent market, which will enhance the liquidity of shares not listed on the NSE.

    According to him, investment instruments approved by SEC could be traded on its platform including shares of unlisted multinational companies.

    “We will open up with equities and bonds many of which are currently being traded on the black or grey market in the first phase,” Ajomale said.

    He added after the initial formative period, the NASD will move to trading on commercial papers and then other complex instruments like derivatives and options.

    He pointed out that as an OTC market, the NASD would not have a trading floor like the traditional exchange but rather trading will be done through the internet and a hosted platform leased from the NSE.”

    He added that the company had developed an integrated market system made up of the Central Securities Clearing System, six settlement banks and some registrars to ensure smooth operations while 40 brokers have been registered to trade on the market.

    “Our vision is to create a market that is accessible throughout West Africa. We intend to become the hub of first call for capital formation in West Africa and we are guided by the principles of Integrity, Performance and transparency in all our dealings with every point of contact- be they investors, issuers, regulators business partners and especially your good selves,” Ajomale said.

    He enthused that NASD would fuel economic growth in the West African sub-region by developing and operating active markets that adhere to the highest standards of performance and principles of integrity while also creating value for its stakeholders and the investing public.

    According to him, by offering more liquidity in investment instruments to the Nigerian capital market, NASD will play a crucial role in the ability of Nigeria to sustain a real growth rate of above seven per cent per annum and ensure that desired capital intensive projects can get cheaper and faster access to funding.

    On the modus operandi or trading, Ajomale said that there would no circuit breaker on pricing of equities as they would be priced based on performance and available information in the market.

  • Ndanusa’s investiture holds Thursday

    THE Chairman, Securities and Exchange Commission (SEC), Dr Abdu Suleyman Ndanusa will be installed as the President, Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) on Thursday at the NICON Luxury, Abuja.

    According to a statement by ICSAN’s Registrar/Chief Executive Officer, Dele Ogunde, Ndanusa ‘’is a technocrat par excellence, thorough bred professional and an excellent administrator. He is a man whose path cuts across the private and public sectors of the economy”.

    Ndanusa has Bsc(Economics) and MBA from the Ahmadu Bello University(ABU), Zaria. He began his career in the former Continental Merchant Bank (CMB) and left as Assistant General Manager (AGM) in 1993 for Empire Group Ltd as Group Managing Director (GMD). He left as chairman.

  • SEC finalises new capital for market operators

    SEC finalises new capital for market operators

    Securities and Exchange Commission (SEC) will soon announce a new minimum capital base for all capital market operators, the apex regulator said yesterday.

    At a media briefing after the Capital Market Committee (CMC)’s quarterly meeting in Lagos, director general, Securities and Exchange Commission (SEC), Ms Arunma Oteh, said the Commission was concluding the new capital requirements for market operators.

    Market operators include stockbroking firms, issuing houses, fund managers, custodians, trustees, and investment advisory firms, share registration companies, corporate secretaries, depository, securities exchange, venture capital, receiving bankers and underwriters among others.

    The Nation had exclusively reported the country’s assessment of securities regulation in Nigeria by the International Monetary Fund (IMF), which supported increase in capital of broker-dealers.

    The report-Assessment of the level of implementation of the International Organisation of Securities Commissions (IOSCO) Principles in Nigeria, noted that due to the weak financial condition of many broker-dealers and limited ongoing monitoring, new risks may arise and remain unaddressed.

    “The SEC should promptly implement a major overhaul of the capital requirements applied to broker-dealers, by raising their initial capital requirements and requiring them to maintain sufficient risk-based capital on an ongoing basis,” the report stated.

    Oteh said the board of SEC has indicated the need to expedite action on the implementation of dematerialisation of share records and documents.

  • SEC needs more capacity to regulate market, says IMF

    SEC needs more capacity to regulate market, says IMF

    •Urges increased capital for brokers

    The International Monetary Fund (IMF) yesterday released its country assessment of securities regulation in Nigeria, underlining major deficiencies in the structure and operations of the Securities and Exchange Commission (SEC).

    The report titled: “Detailed assessment of implementation of the International Organisation of Securities Commissions (IOSCO) objectives and principles of securities regulation for Nigeria,” noted that though Nigeria’s securities regulatory framework has been strengthened and expanded with the enactment of the Investment and Securities Act (ISA), inherent administrative and operational deficiencies constrain the effectiveness of securities regulation in Nigeria.

    According to the report, while there are comprehensive legal provisions to ensure a robust governance structure for the SEC, it does not have sufficient internal policies, procedures and practices relating to its core functions, deficiencies that jeopardise the proper governance and functioning of SEC.

    It noted that SEC´s independence has improved with the adoption of the ISA, but certain remaining provisions and practices affect its full independence, citing the executive and legislative influences on the decisions of the Commission.

    The report underlined that the mere existence of legal or practical powers on the part of Minister of Finance and the Senate has the potential to undermine the SEC´s independence, if the powers are not transparently used.

    “The overall level of technical expertise in the key functions of the SEC is less than optimal. The SEC has 17 departments and staff of over 630 people, of which only 30 per cent are engaged in the core regulatory and supervisory functions.

    “This proportion has increased over the past few years, but the SEC should focus on increasing it as soon as possible. The coordination in a large organisation such as the SEC is challenging, and the current division of responsibilities between the departments seems to create inefficiencies and overlaps.

    “Without sufficient written procedures to serve as guidance and the less than optimal collaboration between the departments, the SEC´s discharge of its functions falls short of expectations, mainly in the areas of inspections, investigations and enforcement,” IMF stated.

    According to the report, while conduct of business requirements for market intermediaries are largely in place, the regulatory framework is weak in prudential and organizsational requirements, including internal control and risk management.

    “The inadequate regulatory requirements and limited on-site supervision of broker-dealers has the potential of introducing systemic risks to the Nigerian financial system. This was experienced during the crisis, and partially addressed through the more stringent requirements on margin lending introduced by the Central Bank of Nigeria (CBN) and the SEC.

    “Due to the weak financial condition of many broker-dealers and limited ongoing monitoring, new risks may arise and remain unaddressed. As in many countries, the securities settlement system is a potential source of contagion.

    The SEC should promptly implement a major overhaul of the capital requirements applied to broker-dealers, by raising their initial capital requirements and requiring them to maintain sufficient risk-based capital on an ongoing basis,” the report stated.

     

     

     

     

     

     

  • Oteh still in the eye of storm

    Oteh still in the eye of storm

    •SEC/National Assembly settlement deadlock

    •Zero allocation affecting staff salaries, paralyses other activities

    •SEC now survives on prayers – Ndanusa

     

    THE faceoff between the Securities and Exchange Commission (SEC) and the Upper and Lower legislative chambers over the latter’s insistence that the Director-General of the Commission, Ms. Arunma Oteh, must be sacked, still lingers, even as the presidency has maintained a dignified silence on the matter.

    The Nation can authoritatively report that the fate of the embattled DG hangs in the balance as the presidency is yet to reach a truce with the lawmakers.

    Presidency sources who spoke with The Nation said the Federal Government is not willing to accede to the request by the National Assembly to get Oteh out of the way.

    Confirming this development, Dr. Doyin Okupe, Senior Special Assistant to the President on Public Affairs, in a chat with The Nation over the weekend, said the presidency has resolved “to maintain a no comment stance on the matter.”

    At the Ministry of Finance, all attempts to get the official position were futile as nobody was willing to speak on the matter.

    However, an official in the ministry who asked not to be named disclosed that the presidency would not like to be blackmailed by the National Assembly into doing its bidding.

    According to the official, “the presidency capitulated to the pressures of the Senate when the Upper chamber demanded that the former Director-General of the Bureau of Public Enterprises (BPE), Ms. Bola Onagoruwa, be sacked by the President.”

    Not wanting to be pushed around by the legislators, the official said the President “may have adopted a quiet and non-open confrontation with the legislators.”

    Reliable sources at the Commission told The Nation that “Arunma Oteh will not resign.”

    According to one of the sources, who would be named, “She will not resign; she can only resign based on principles and conviction not on the basis of parliamentary rascality that is driven by greed.”

    Attempts to get Ms Oteh to speak to the issue of the faceoff between her and the members of the House of Representatives did not yield any result as she has been directed by the presidency to remain silent on the matter.

    However, the decision of the House of Representatives to withhold budgetary allocation to the commission, the source said, is serious threat “to the oversight and regulatory functions of SEC along with its market development programmes and initiatives,” all these the source said are funded by the budget and “this House of Representatives action is threatening these activities, funding is the life of the commission.”

    According to the source, “there is knowledge gap which introduces challenges in the market place thus imperiling investments. Investor education has also been affected and as we do not undertake investor education financial inclusion in Nigeria is already in peril.”

    The commission, the source added, is being run “on the basis of near paralysis and foreboding of doomsday, the overall gamut of expenditure is suffering, no revenue earned, no cost expended, we have been barred by the apex regulator of the Nigerian society. We cannot even afford the bare necessities we cannot move or lift a finger.”

    Another twist as being added to the SEC crisis, with the chairman of the board of the Commission (SEC), Dr Suleiman Ndanusa, saying the commission has been surviving on prayers in the last four months after the National Assembly refused to appropriate money to it in the 2013 budget.

    At the inauguration of the Administrative Proceedings Committee (APC), in Abuja on Wednesday, Ndanusa said: “The capital market is a vital organ of the economy. It is imperative to have a well funded SEC to ensure transparency and accountability. Join us in prayers so that the matter can be resolved sooner than later.”

    Another source at the SEC headquarters in Abuja told The Nation that “zero allocation to SEC is a most unpatriotic recourse by people whose interest is at variance with the national interest with intent to paralyse the reforms efforts that have engendered significant confidence in the Nigerian capital market.”

    It was further disclosed that “the all share index by 2010 when she assumed office hovered around N5trillion between then and now it has jumped by 65 per cent in excess of N10trillion.”

    Trouble between the SEC and the House of Representatives started on Thursday 15th March, 2012, when Oteh accused the Chairman, House Committee on Capital Market and other Institutions, Mr. Herman Hembe, of corruption.

    She also alleged that 24 hours before the scheduled public hearing on the collapse of the capital market started that Hembe had demanded N5million from her.

    Oteh had also alleged that the committee had demanded another N39million from the SEC to fund the hearing.

    She claimed to have turned down both requests because she felt that the requests were inappropriate. She announced to the whole world at the public hearing that “in October last year, Hembe had collected money and a first class ticket from SEC on the excuse of travelling to the Dominican Republic to attend a conference on capital market.”

    The committee said it had discovered that Oteh had spent N30million on hotel accommodation in eight months, following her appointment in January 2010.

    The committee further raised the issue of the N66.1million the SEC approved to rent an official apartment for Oteh in Maitama. The approval, the committee alleged was to cover two years’ rent, this is after she had spent N30million on hotel accommodation in eight months. The committee observed that the approval was in breach of the monetisation policy of the Federal Government.

    The committee also discovered that she engaged two members of staff of Access Bank to work as special advisers in SEC. The two Access Bank staff were reportedly paid allowances equivalent to those of a director in the Federal Civil Service. The two officers were also said to have drawn their salaries from Access Bank as at the time of the public hearing.

    Reacting to Oteh’s outburst which came as shock to the legislators, Hembe described the allegations as “deliberately made to derail the objective of the public hearing.”

    Oteh, however, had the final word which cut the legislators deepest when she said that “this sitting has become a Kangaroo court. Not even in Idi Amin’s Uganda did we have this type of hearing.”

    Before proceeding on the 2013 Easter break, the angry legislators had prevailed on President Goodluck Jonathan not to fund the SEC from extra budgetary provisions, threatening dire consequences for the president should he flout the order.

  • SEC is sustained by prayer, says Ndanusa

    SEC is sustained by prayer, says Ndanusa

    The face-off between the National Assembly and the Securities and Exchange Commission (SEC) has been taken to the Almighty.

    The Commission has resorted to prayers to sustain its operations as the regulator of the capital market.

    SEC Chairman, Dr Suleyman Ndanusa, made this known yesterday during the inauguration of the commission’s Administrative Proceedings Committee (APC) in Abuja.

    Ndanusa told reporters that they have been praying for a speedy and amicable resolution of the crisis.

    The commission is operating without any allocation from the Federal Government at the insistence of the National Assembly.

    After passing this year’s budget, the House of Representatives refused to okay the commission’s budget. It ordered that no budgetary or extra budgetary provisions be made available to the commission until its Director-General, Ms. Arunma Oteh, is removed from office.

    When asked how SEC is funding its operations without a budget, Ndanusa said: “The secret is prayer and prayer and prayer. We have been praying. But I tell you there is nothing that cannot be resolved by the grace of God. So far, so good, to God be the glory. But, please, I call on you to join in the prayer so that this matter would be resolved amicably.”

  • 213 operators have expired fidelity bond, says SEC

    The Securities and Exchange Commission (SEC) has indicated that 213 capital market operators, including several high-brow law firms, reporting accountants and banks, are operating with expired fidelity bond. This development is posing potential risks to the system.

    A review by The Nation on the condition of capital market operators under the newly introduced Capital Market Operator Search (CMOS) of SEC showed that some 213 capital market operators pose risks to capital market operations by not providing fidelity bond against internal malpractices. The CMOS is a new special link on the homepage of the apex capital market regulator.

    A fidelity bond is essentially is a form of insurance against internal fraud, malpractices and willful professional negligence. It provides cushion for various losses that might arise from employee’s dishonesty. In line with international best practices, the Nigerian capital market regulation requires operators to possess subsisting fidelity bond.

    The expiration of their fidelity bonds makes the functional registration of the companies and individuals as capital market operators incomplete.

    According to SEC, about 46 per cent of operators with expired fidelity bond, are solicitors including high-brow Senior Advocates of Nigeria (SANs) law firms. At least, 97 law firms registered as solicitors have expired fidelity bonds.

    Accounting firms are the second largest group of culprits with several well-known accounting firms, with registration as reporting accountants, operating with expired fidelity bonds.

    At least four banks, which were registered as issuing house or investment adviser, were listed among the defaulters while several fund managers, registrars and brokers were also listed in the search.

    The Nation gathered that the operators with deficient fidelity bond might not be allowed by SEC to handle transactions.

    The source said what the defaulting operators do is to rush to renew such deficiency whenever they have capital market transaction for regulatory approval. He cautioned investors, issuers and other users of capital market services to request for evidence of full clearance and subsisting complete registration before engaging the service of any operator.

    The list of operators with expired fidelity bond came in the wake of the alarm by SEC that many illegal fund managers have been exploiting unsuspecting investors.

    According to SEC, most of the fund managers are concentrated in the Eastern region, especially Anambra State where some 11 illegal operators have been identified.

     

  • Reps urge Jonathan to sack Oteh

    Reps urge Jonathan to sack Oteh

    The House of Representatives on Thursday urged President Goodluck Jonathan to implement its resolution by sacking the Director-General of the Securities and Exchange Commission (SEC), Ms Arunma Oteh.

    The News Agency of Nigeria (NAN) recalls that the house, after investigating the near collapse of the capital market, resolved not to have anything to do with the commission.

    The house promised that it would not rescind its decision on the issue unless Oteh was sacked for not having the minimum professional qualification prescribed for the office of the Director-General of SEC.

    The resolution followed a motion moved by Rep. Ahmed Datti (CPC-Kaduna) which was unanimously adopted.

    Leading the debate, Datti said the motion urging the removal of Oteh was because her appointment was a gross violation of the commission’s Act.

    He said that Oteh did not possess the minimum professional qualification prescribed for appointment to be the head of SEC.

    Datti said most of the resolutions of the house, though products of motions, hinged on fundamental public duty placed on public officers by the constitution under the Fundamental Objectives and Directive Principles of State Policy.

    The legislator stressed that the executive had adopted the approach of picking and choosing the implementation of resolutions of the Senate on the dismissal of Abdulrasheed Maina.

    He noted that the resolution on Oteh, which was passed much later, was still being disregarded, in spite of a long pending motion on her removal.

    “Resolutions bordering on the breach of extant legislation should not be treated with levity, as such tends to portray government in bad light,” he said.