Stockbrokers Renew Call for Constitution of SEC Board

Trading Floor

Goddy Egene

For the umpteenth time, stockbrokers, who are the middlemen between buyers and sellers of stocks, have called on the federal government to reconstitute the board of the Securities and Exchange Commission (SEC), saying this will give a boost to investor confidence in the market.

SEC is the apex regulator of the nation’s capital market and it has been without a board for over three years. Besides, the director general and the three executive commissioners are all in acting capacity, a situation that makes it difficult for them to make serious long term decisions. The development is also retarding the implementation of the 10-year Capital Market Master Plan.

During the tenure of former Minister of Finance, Mrs. Kemi Adeosun, stockbrokers and other stakeholders made several calls for the constitution of the board without any response from the government. A new minister, Mrs. Zainab Ahmed, took over last month.

While efforts are being made to restore investor confidence to check the continued bearish state of the stock market, stockbrokers have said, given their interactions with investors, the constitution of the board of the commission will go a long in ensuring significant level of stability in the market.

The Chairman of Stock Broking Houses Association of Nigeria (ASHON), Chief Patrick Ezeagu, who spoke on behalf of his colleagues, told THISDAY that the federal government should not delay any longer to get a board for SEC.

“We have been calling for a board for SEC without response from the government. Now that we have a new minister of finance, we are repeating that call that SEC, which is regulating a market of several trillions of naira should have a board to enable a smooth running. It is disheartening to know that most of the laudable projects espoused in the master plan are being affected by lack of a board, which is statutorily mandated to take some major decisions in that direction. Apart from not having a board, the DG and the commissioners are all in acting capacities. This does not send good signals to investors out there. Appointing a board for the commission and confirming the officers would significantly boost investor confidence, thereby restoring some level of stability to the market,” Ezeagu said.

Before now, a chartered stockbroker and Chief Executive Officer, Sofunix Investment and Communications Limited, Mr. Sola Oni, had said, “The new finance minister should tackle head-on the corporate governance challenge staring SEC in the face by doing just two things: constitute the board of SEC and address the long -awaited issue of substantive director general and commissioners for the commission immediately. This will enhance professional performance of our commission as a quoted company cannot be allowed to operate without a board of directors.”

He added that the minister must intensify efforts at reviewing the current status of the existing policies that are meant to create enabling environment for the private sector to operate optimally.

“This is where the quoted companies can deliver values to the shareholders and attract investors’ patronage on the secondary market. There must be an impact assessment of Nigeria’s macroeconomic framework to ensure that government’s intervention is not at variance with the realities. Financial inclusion policy should be vigorously pursued. Savings culture is ebbing away in Nigeria and without saving, there cannot be Investment. There should be a deliberate review of Investment policy of pension funds in the stock market to make them more active as one of the methods to deepen the market,” he said.

Oni added, “She must consult with the stakeholders in the capital market ecosystem as new challenges affecting the market require new solutions and the stakeholders shall come up with workable suggestions.”

Some investment bankers had told THISDAY that many investors are discouraged by what they term ‘weak’ regulation because of the absence of board for SEC for almost three years.

“We are talking about financing the budget, we are talking about infrastructure projects, all these are better sourced from the capital market. But I can tell you that while the Nigerian market has potential to provide significant part of the funds, most investors are still reluctant to bring their money because they believe the absence of a board for SEC is highly discouraging,” an investment banker had said.