VICTORIA ONU, ABUJA
THE Securities and Exchange Commission has threatened to sanction Capital Market Operators that are frustrating the electronic dividend mandate process.
The Commission warned all stakeholders in the Nigerian capital market to comply with all its directives on e-dividend as defaulters would be sanctioned appropriately.
Addressing journalists at the end of the first Capital Market Community Meeting for this year, the Director-General, SEC, Lamido Yuguda, said that the Commission had observed that some operators were frustrating its initiative in this regard.
He said, “The Commission has observed that certain Capital Market Operators frustrate the e-dividend mandate process. We implore all stakeholders to comply with all directives of the Commission in this regard, as defaulters would be sanctioned appropriately.
“We have observed that the growth in the number of mandated accounts has been on the decline for some time. The Capital market community has directed its e-Dividend Committee to engage with the Committee of Heads of Banking Operations to encourage better cooperation from banks as we tackle the challenges of unclaimed dividends.”
He said a major highlight of its activities this year was the reintroduction of periodic renewal of registration by Capital Market Operators.
The rationale for this, according to him, is to ensure that operators in the market are fit and proper at all times and to strengthen the supervision and monitoring activities of the Commission.
The renewal process, he said, was electronic, noting that the deadline for 2021 renewal is April 30, 2021.
On the implementation of its Capital Market Master Plan, he said the Commission had commenced a review to update the assumptions, and align the plan with current realities.
Similarly, Yuguda explained that the Commission had released new rules on warehousing, collateral management, crowd-funding, fund management products and nominee companies to ensure proper regulation and development of the market.
The SEC DG noted that the Commission recognised the impact of FinTechs on capital market activities, and assured the public that it remained accommodative of this development.
He added, “We shall continue to engage players and support them to operate lawfully. Our aim is to ensure the delivery of safe products and services without stifling innovation.
“I therefore encourage FinTech firms to approach the Commission for due registration and desist from operating illegally.
“In the same vein, registered CMOs are advised to refrain from providing any form of support to unregistered entities operating unlawfully within our market, as such action would not be condoned.
“Furthermore, we urge CMOs to improve on their level of compliance, timeliness and correctness of disclosures and other filings made to the Commission.”
On the Commission’s directive to Capital Market Operators to update investors’ KYC information, he lamented that the level of compliance had been low.
Despite several engagements, the SEC DG explained that as of April 8, 2021, there were still 4,012,311 accounts with incomplete KYC information.
“This exercise is critical to deepening the participation of retail investors and we direct all CMOs to accord it the highest level of priority,” he added.
As part of measures to support the development of the commodities ecosystem, Yuguda said the Central bank of Nigeria had revalidated its 59.9 per cent holding in the Nigerian Commodities Exchange to ensure its appropriate positioning for effectiveness.
This, he noted, would address the funding problem plaguing the NCX, adding that several engagements were ongoing with relevant authorities to promote trading on the Exchange.
“The capital market community believes that the repositioning of the NCX by the CBN would deepen the commodities market.
“Thus, the Commission is engaging with the CBN to encourage acceptance of Warehouse receipts by banks as collateral.
“With the formulation of Rules on warehousing and collateral management, warehouses will be registered by the Commission and accredited by the respective Exchanges.
“In addition, the Standards Organization of Nigeria will continue to issue standards that Commodities Exchanges can link up with,” he added.
He said the Non Interest Capital Committee was collaborating with the Federal Inland Revenue Service to issue a tax circular clarifying the tax treatment of non-interest instruments.
Despite the turbulence experienced with the outbreak of the pandemic, the SEC Boss said the Nigerian capital market stood resilient.
He said, “The capital market community contributed its quota to the fight against COVID-19. I am delighted at the efforts that we made and pledge that we shall not relent in our efforts.
“To this end, our next phase of the support in the fight against COVID-19 will be the establishment of the Strategic Health Impact Fund for Transformation. This is planned to be a N100bn fund for investment in healthcare assets in Nigeria.”
Yuguda reiterated the commitment of the Commission to advancing the development and integrity of the Nigerian capital market.
