In this interview with newsmen after his first Capital Market Committee (CMC) meeting, the Director-General, Securities & Exchange Commission (SEC), Dr. Emomotimi Agama said the new board and management of the SEC is determined to tackle challenges facing Nigeria's economy and support the federal government bid to achieve $1 billion economy. Kayode Tokede presents the excerpts
This is your first CMC as DG, can you give us an overview of what you told market stakeholders at the meeting?
Nigeria is certainly a developing and emerging market and an emerging market with the population we have must have a robust capital market that will help in development. It is important that we continue promoting capacity and we hope to unlock the full potential of the market in aligning with the Renewed Hope Agenda of President Bola Tinubu.
Our responsibility as the Management of SEC is to drive initiatives that will build our economy. We are providing the regulatory environment to ensure that we can attract investments to this market. we believe in a short while the National Assembly will pass the New ISA that will give us more powers to ensure we have a robust and progressive market.
We want investors to have the opportunity to save and the opportunity to invest and the opportunity to have a return on their investments. As a new management we will listen to the people, every complain that comes to the SEC will be treated. We are going to run an administration that takes the people as very important.
We all know that Nigeria is a commodity-based economy and so we must tap at the opportunities available to us. The SEC being the regulator of the commodities space will collaborate with the Federal Ministry of Trade and Investment to organise the second International Commodities Conference later in the year.
Part of what we are also doing is to embrace technology i the dissemination of information and also use technology in enhancing access to the market. that is very critical for us especially when you look at the demography that exists in this country. This country has a teeming youth population and the only way we can reach them is via technology and that is what we will do. We also know that the use of technology to enhance various products in the market is very important to us. We will work very closely with other regulatory agencies in making sure that many of these happen.
Any achievements so far?
There have been significant developments in the Nigerian capital market for 2024. In the primary market, the Commission has so far approved nine new issuances totaling N1.23 trillion, reflecting increased confidence in the market. In the fund management space, he noted that the Net Asset Value (NAV) of Registered Mutual Funds grew by 111.08% to N3.335 trillion, indicating a strong and sustainable growth.
Is it the norm for companies to come to the market without their offers being approved and announcing those offers?
It is important for us to share information and knowledge which may not be on the other side. I am sure you know what is called Book Building. And once there is a Red Herring it is allowed for the company to share information regarding an offer, once a Red Herring has been approved. A Red Herring does not speak to the approval of the offer. It only speaks to when we want to come, are you aware we want to come. Once the Commission approves that pending the discovery of price wherein a formal approval is given, a company is allowed to do so.
What is the official figure of unclaimed dividends?
As at December you had not claimed your dividend, in March a new dividend will be declared and that will add to the old one. Hence it is appearing as if it is rising, it is still the same people, not until they come to claim them, they will continue to add up. As at March 2024 it was about N215billion and what we desire to do is to make sure we bring that down. We are putting up mechanisms to make sure that happens.
What we have done also in order to enhance the process is that we now have a new portal that allows you to do what we call self-service. One of the other things we are going to do is to create an app which will be in the Google play store for people to download to enable them access their dividends real time and claim same. We are working with technology and that will deal with the issue about the increase.
The SEC e-dividend portal request for BVN at a stage. Is that website by SEC?
This is very important knowing fully well the cyber security threats that exists in the space. However, if you access that portal from the SEC website, it is genuine. The only other website that is genuine that it can be accessed from is the NIBBSS website because that platform was built in conjunction with NIBSS. You cannot run away from the fact that a lot of people might be trying to clone the website like they do for other institutions. But my guide is simply go to the SEC website which is fully protected and access it.
Requesting for BVN is not out of place because for now it is the most authentic retrieval of information in the financial space. We need to verify that you are who you say you are. if the BVN provided does not match with your identity, it means it's not yours. As an institution we try to protect the investor and protect us too as regulators. We will try to make it as easy as possible and also as protected as possible too.
We have been talking about issues in the capital market like unclaimed dividends. Any improvements?
For the SEC it is a very important topic because it speaks to the investors themselves. Unclaimed dividends are dividends that have not been paid to investors. The reason why investors come to the market is to have returns and when the return is not getting to them it becomes a challenge and the SEC is very serious about it. Very recently the Senate Committee on capital market had a hearing on the matter and we were there fully. Fr us at the SEC, we believe that we can deal with it and that has taken us into rejiging the entire process.
Very recently, the SEC and the Committee for Identity Management for the Capital Market looked at the entire spectrum of the unclaimed dividends issue and identified that the major issue is lack of identification of investors. That alone brings to the fore that technology will be a solution. So we are looking at the full hog of the entire process trying to make sure that we identify people because one of the reasons why dividends are not paid to people is because of their account numbers and other missing details that are required by the companies to be able to do that.
The SEC is in the fore front of making sure that the unclaimed dividends are reduced and at the end of the day completely erased. For the SEC, we will continue to do our best, we will employ technology, we will employ education, we will employ persuasion, we will employ every means that will cause people to understand the processes around claiming dividends, the processes around identification and the processes around making sure people understand what they need to do to get their dividends back. For us any effort to reduce these unclaimed dividends will be a positive one for us.
What is the SEC doing to attract more youths to the capital market?
It is through technology and advertisement. One of the things we intend to do is a podcast that will allow young person's able to listen and hear about investments. It is a forerunner of a bigger project which is the capital market radio. We are committed to protecting investors, as evidenced by the recent conviction of a Ponzi scheme operator, this reinforces our stance against market offenders. It is a strong statement on the Commission's unrelenting efforts at combating Ponzi schemes and illegal operators in the market.
Can you tell us some measures in place to ensure that the youths are not defrauded when they come to the market?
You are talking about the Virtual Assets Service Providers Regulations. The SEC has been at the forefront and we have the rules already. To make life easy for these youths we have created the Regulatory Incubation Programme, we extended that by creating the Accelerated Regulatory Incubation Programme. We are trying to make sure that it is seamless to get into the market. in the process, we guide them and advise them to meet regulations. The current SEC is the one that speaks to the people and engages them. We want the progress of everyone. We are here to work and serve Nigerians.
What efforts do you intend to make to attract listing?
We will continue to encourage companies to list and urged the exchanges to take steps to attract new listings to align with the government's $1 trillion economy target. The Commission is ready to continue promoting capacity building on derivatives both for market operators and regulators. He also expressed optimism about unlocking the full potential of the capital market, in aligning with the Renewed Hope Agenda of the President Bola Ahmed Tinubu led administration.
There are advantages to listing, those advantages have been there. Perhaps it is time to get people to understand those advantages because if you do not provide information the people would not know. Come into the market means you have access to long term funding. The current interest rate in the money market is not friendly so for any company that understands the dynamics of raising funds, the best place to come to is the capital market. that is where you have sustainable long term funding. funding is the key to the development and growth of any institution. So without any other incentive to the extent that you can obtain long term funding from the capital market, then it is the place to go. But one thing I promise and one thing we promise as a team is that Time to Market will be properly dealt with. Approvals for issuances will be done swiftly so that when companies desire to come to the market, they know exactly what time approvals will be given. We are also going to help them even in the process of submitting their applications, which is now done electronically. If you want to do an offer, the application will be submitted electronically. What does that do? It helps with the process of review and feedback.
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As part of what we are doing also, we are encouraging Nigerians to invest in the market and we are putting up adverts to tell Nigerians that we are ready for business. We have our plans and they are going to be executed so encourage your companies, encourage those you know there cannot be a better time to come to the market other than this time. We are very thankful to the President for appointing us and the only way we can show gratitude is to do our part in making sure that this market grows and that is indeed our intention.
How would you gauge compliance to regulation by listed companies?
So far it's been a mixed bag. Clearly there has been very significant strides by companies to comply with our regulations. Of course they are aware that a new Management has been appoint ted by the President, so clearly the direction is changing and the mood is changing believing strongly that we are here for business which is compliance. For those that are yet to comply, we are encouraging them to comply, so for this administration it's about enc0ouraging them to comply because that is what we desire for companies to do rather than punishment
In case an offer is oversubscribed what will the SEC do?
The rule says if an offer is oversubscribed, 15 per cent of the oversubscribed portion is allowed to be absorbed by the company. However, as a Commission, we are very amenable to opportunities that exist and so it is not cast in stone. If we discover that the oversubscription is beyond 15 percent and there is good reason for the absorption, we take each company case by case. So that people know exactly what they are doing. The laws are there and we must obey the laws. So we have a discussion and make sure that opportunities are provided especially when it is regulatory induced, we must ensure that every policy of government succeeds. We are partners with every institution of government to making sure that their policies succeed as they are partners with us to making sure that our policies succeed. But fundamentally, the rules say you take 15 percent of over subscription.
