Stockbrokers Set Agenda For SEC’s Acting DG

Stockbrokers have set an agenda for the acting director-general (DG) of the Securities and Exchange Commission (SEC), Mr Mounir Gwarzo.

The brokers who spoke to LEADERSHIP noted that although the challenges facing the commission are numerous, he should follow the transparency and improvement framework of his predecesdor, Ms Arunma Oteh, as well as tackle the issue of unclaimed dividend which stands at N60 billion in 2013. Speaking on the issue, a broker with Calyx Securities Limited, Mr Tunde Oyediran, said, “The acting DG must drop the high fees and encourage other market stakeholders to do likewise. There is room for further reduction in transaction charges and the acting DG must work across board in implementing investors’ interest charges that would attract more domestic investors’ participation.”

He added that the commission must begin to look at its revenue mix and glean from other climes how the supervision/enforcement versus transaction earnings ratio works out.

Stockbrokers are of the view that the SEC can do more to reduce the out-dated laws it currently deploys. This is nothing that could be gleaned from a list of laws that are no longer suitable for present day practice and business engagements. Accommodating private equity firms, demutualisation, creating an enabling environment from crowd funding, listing of public entities, rules on minimum float requirements, use of waivers by the Nigerian Stock Exchange (NSE), technical and full suspensions, listing of regional and sovereign funds, use of technology and admissibility of evidence of electronic documents, conduct of inspections, surveillance, investigation, enforcement and sanctions, rulemaking, market development, investor protection, collective investment schemes, certification courses, training for market participants and definition of stakeholders and licencees are issues that will have to be addressed as part of the 10-year master plan.

They also noted that above all, the zero allocation to the SEC since Oteh’s tussle with the house of representative members still remains another bottleneck, calling on the implementation of the ongoing reforms in the Nigerian capital market, including the demutualisation of the exchange, West African capital market integration programme, capital market development master plan, bill compelling private companies of certain size to list on the exchange, market making, share buy-back arrangements, among others which are expected to further deepen the activities in the Nigerian capital market.

According to the managing director of Highcap Securities Limited, Mr David Adonri, a lot of rules have been reviewed with new rules being made to cover the area of deficiency, and so Gwarzo has to continue the implementation of the policies that have been laid out. However, he said that more attention has to be devoted to the primary market, saying that throughout Oteh’s tenure there was almost no offer for subscription. The primary market is the reason the capital market exists because that is where capital is formed for the economy. The acting DG, therefore, has to focus more attention on the primary market. He urged Gwarzo to forget about the recapitalisation of the stockbroking firms and look at other areas where the market needs to be deepened.

While the chief relationship officer/broker of TFS Securities and Investment Limited, Mr Charles Fakrogha, said that Gwarzo is an experienced stockbroker, having been a director of operation in the SEC, and thus aware of the challenges in front of him now.

“The stockbroking community wants an efficient, fair and a disciplined market, fair hearing to operators, zero tolerance for market infractions and investors’ education. Investors’ education is very key to the growth of the capital market. There are lots of regulations that can be put in place but if investors are not educated and are not aware it becomes a problem. Without the investors there would be no market. He is to ensure that investors are protected and there is market integrity,” Fakrogha said.

He stated that the stockbroking community would cooperate with him and ensure that his tenure is successful.

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