Ndubuisi Francis in Abuja
In line with its drive to ensure the actualisation of the target of the Capital Market Masterplan on Financial Technology (FinTech), the Securities and Exchange Commission (SEC), has amended rules governing digital assets and established a Digital Exchanges (DEX) Division dedicated to the supervision of all duly licensed digital asset platforms.
The outgoing SEC Director General, Lamido Yuguda, who disclosed this weekend at the end of the first Capital Market Committee (CMC) meeting in 2024, added that SEC would very shortly issue appropriate guidelines to facilitate an efficient capital-raising process for the proposed recapitalisation of banks.
CMC is an industry-wide committee comprising the SEC, representatives of capital market operators, trade groups, and other stakeholders.
Though Yuguda did not provide details on the amendment, the commission had in September 2020 unveiled its treatment and classification of digital assets where it specified regulatory purview over Crypto tokens traded on a recognised exchange, utility tokens traded on a recognised exchange, security tokens that have features of securities and funds and derivatives of these three types of tokens.
In his opening remarks at the virtual event, Yuguda who chairs the CMC, provided an assessment of the global economic landscape, acknowledging the headwinds faced by the global economy in 2023, including the COVID-19 pandemic’s lingering effects, rising inflation, and geopolitical tensions.
He highlighted the impact of this slowdown on African financial markets, including the depreciation of African currencies and a decrease in total market capitalisation.
However, he expressed optimism that the recent actions of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) have led to an uptick in the value of the naira.
The outgoing SEC DG highlighted the significant achievements in the Nigerian capital market in 2023, adding that trading activity in equities and bonds increased, with the NGX All-Share Index reaching a high of 45.90 per cent and the FMDQ Sovereign Bond Index posting a reasonable 8.79 per cent return.
Activity on the NASD exchange also rose significantly, with volume and value rising by 34.08 per cent and 24.18 per cent respectively, he added.
He also reported the positive milestones in the Commodities Sector with AFEX and the Lagos Commodities and Futures Exchange witnessing increased volumes and values traded in agricultural commodities.
Yuguda notified the CMC members that aligning with and directly supporting the federal government’s infrastructure development goals, the SEC approved five infrastructure fund shelf programmes totalling N1.5 trillion, which he described as a major step forward.
“The Commission actively supported the growth of the Fund Management industry in 2023 with approvals for new mutual funds (N18.20 billion) and discretionary/non-discretionary investment products (N17.60 billion).
“In line with the commission’s drive to ensure the actualisation of the target of the Capital Market Masterplan on Financial Technology (FinTech), the commission amended rules governing digital assets and established a Digital Exchanges (DEX) Division dedicated to the supervision of all duly licensed digital asset platforms,” he added.
On market supervision, he explained that the commission had intensified its supervisory efforts, focusing on fund managers and conducting inspections to address vulnerabilities and enhance stability.
This, he said, had resulted in the implementation of some corrective measures designed to strengthen the overall health and stability of the fund management industry.
According to him, a robust risk management and internal control framework has been put in place for the National Investor Protection Fund (NIPF), adding that operations will begin this quarter.
Commending the successful launch of a new e-Dividend Mandate Management System (eDMMS), Yuguda said it would make it easier for investors to mandate their accounts for electronic dividends.
The CMC chairman also told the participants that work continues to ensure the passage of the Investments and Securities Bill 2024 and that implementation of the Revised Capital Market Master Plan (RCMMP) was ongoing.
He announced two engagements that would be held next month – the launching of the Securities Issuers Forum to discuss attracting more issuances to the market and a roundtable on leveraging crowdfunding to support MSMEs.
He expressed SEC’s commendation to the CBN for the recently announced policy on bank recapitalisation, noting that the commission had drawn useful lessons from the previous exercise and will very shortly issue appropriate guidelines to facilitate an efficient capital raising process in the present exercise.
