My Agenda Is To Implement 10-year Capital Market Master Plan – Gwarzo

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In this interview with FRIDAY ATUFE & OLUSHOLA BELLO, the acting director-general, Securities and Exchange Commission (SEC), speaks on the transformation of the Nigerian capital market in his 100 days in office 

Since your took over as the acting director-general of SEC, what policy measures have you put in place to stabilise the Commission and the entire capital market?

This is my first interview. When I came on board there were several requests for me to grant interviews but I resisted because I felt what is needed when I am going to speak is to say what I have been able to achieve so far. If I had spoken to people first or second week after my appointment I would have been talking about what I am going to do, and so I don’t think it is the right approach. I think a leader should be able to communicate what he or she has been able to achieve.

LEADERSHIP is the first media house I am granting interview with and I am also pleased of the opportunity given to me by the medium. When I came on board about 100 days ago, I had a meeting with my staff to share with them my vision. First, we looked at all the staff related matters that we inherited and those that could be resolved. For instance, there has been an issue to do with promotion, we quickly set up a committee and also got a consultant from FITC to begin the process of administrating examination and interviews and I am pleased to say that has been completed. I have also engaged the staff and pleaded for patience when you want to make a change it takes time and also pleaded with them to double their efforts both in terms of their commitment and efficiency in the delivery of the organisational goals.

 

The headquarters of the Commission was turned into a Mecca of some sort as soon as you were appointed acting DG, what was responsible for this?

With all sense of modesty, I want to believe it is a sign of confidence that the capital market stakeholders have in the new management and in the commission. This shows that the market really want to engage the Commission. We used the opportunity to discuss some critical issues in the market and I am happy that all the trade groups that came put forward some of their issues which the Commission is working on. I must say is a sign of confidence on the leadership and on the Commission as well.

 

Observers have said that market abuse was one of the factors which escalated the crisis in the Nigerian capital market in 2008, how has the Commission tackled this issue and to avoid reoccurrence?

We all know what happened during the time, there were mistakes from all the capital market stakeholders. I think everybody has learnt his or her mistakes, the regulators, the operators and even investors have all learnt their mistakes. For investors, the issue of jumping into any kind of stock transaction would not be a regular occurrence now. It is also important to say that market is not to be rosy all the time, because when you are playing the capital market it does not mean that every day the market will be up, it is a circle, it goes up or down.

 

Recently SEC released new rules on demutualisation of exchanges, what is the Commission doing to carry all stakeholders along?

I believe we have done well, the issue of demutualisation in the Nigerian Stock Exchange (NSE) has been in the pipeline for the past 15 years and in the last three years with the new leadership of the NSE clamouring for demutualisation of the exchange which is also an international best practice. Some emerging market such as Malaysia, South Africa, Kenya has gone through this process. One of my earliest actions as the acting director-general was to get the minister of Finance/CME, Dr Ngozi Okonjo-Iweala to approve the rules on demutualisation which had stalled for some time.

We have finally released those rules which should form a good basis for the NSE to proceed on its demutualisation plans. We carried the market along by exposing the draft rules and regulations put together by the Commission to the market, and the NSE, Charter Institute of Stockbrokers (CIS), the Association of Stockbroking Houses of Nigeria (ASHON), the Association of Issuing Houses, and some other trade groups sent in their comments, which the rules committee looked into, taking all comments into consideration.

 

With the rules on demutualisation out, is there a timeframe for NSE to demutualise?

The ball lies with the stock exchange, at SEC we have done our own which is to create the rules, it is now left for the NSE to decide when they want to pursue the demutualisation. It is not for SEC to say this is the time to do it but if they need our assistance in terms of advocacy and intervention, we are ready to do that but the ball is in their court.

 

What other rules or strategies have the Commission put in place to fast-track Nigeria’s transition to a world class capital market?

In the last three months that we came on board, we also came up with rules on Complaints Management Framework which we have released that ensures investor complaints are dealt with more swiftly. Starting from the operator, to the Trade Group or SRO level before reaching the SEC if it is still unresolved. The complaints management framework and rule is ready but we are waiting for trade group to tell us they are ready for the implementation. We also have rules on National Investor Protection Fund (NIPF), this is very important to the market, particularly to the investors.

 

What progress has been made with the development of other segments of the market like the bond and OTC market?

I challenged the capital market operators on this issue because they are not doing well in reviving the corporate bond market. In the last 10 years, the corporate bond market has been dormant, activities on this platform have being dominated by the federal government bonds and some national bonds.

We need to go back to our practice 20 years ago, when we used to have an investment bank who will pick a company, analysed it and identify the financing needs of the company, nurture the company and advise the company to come to the market to raise funds through equity or debt market.

 

What is being done to resolve the impasse between the National Assembly and the Commission?

Let me use this opportunity to thank the National Assembly. They have invited me: both the Senate and the House of Reps and we have fruitful deliberations and they have promised and are ready to work with the Commission and we are ready to work with them. There is a very good relationship between us and the National Assembly. They have looked at our budget. The impasse has been resolved and we have an excellent relationship now. We hope to get, even if we didn’t get allocation in the 2015 budget, we hope our budget will be approved.

 

If you were confirmed as the substantive DG of the commission, what is your projection for the market in the next few years?

I have only one agenda for the market, my agenda for the market is to faithfully and religiously implement the 10-year Capital Market Master Plan. It will be recalled last year SEC set up three committees to drive market growth and the best brains in the market participated in the three committees and they worked tirelessly and came up with an excellence report which was launched last year, what we lacked in the country is the faithful implementation of reports. So what I am going to do is to faithfully implement that report and we have started the implementation on some aspects of the reports and in every CMC quarterly briefing we will report to the house on how far we have gone.

Source : Leadership

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