SEC optimistic about states meeting ISPO obligations

•Pledges to protect investors in bond market

BASED on assessed situational factors in the economy, the Securities and Exchange Commission (SEC) has allayed fears in some quarters that states may be ill-at-ease in fulfilling their obligations under the Irrevocable Standing Payment Order (ISPO) in the bond market.

   The Acting Director General of the Securities and Exchange Commission (SEC), Mounir Gwarzo, who raised this optimism Tuesday, while welcoming the officials of the Association of Corporate Trustees who paid him a courtesy visit at his Abuja office, also pledged to protect investors that stake their fund in bond instrument in the nation’s capital market.

The ISPO is an important instrument that gives bond investors comfort as funds are deducted at source from the State’s federal allocation to go into the sinking fund from which investors are paid their coupons

Speaking to the Trustees, who had earlier raised the issue as their major concern, Gwarzo said: “The decline in crude oil prices affects the revenues of State governments and it is an issue we need to look at closely especially with a view to protecting investors which is ultimately our major responsibility”.

  He assured the Trustees that the SEC, with the support of the Coordinating Minister for the Economy, would insist on the sanctity of the ISPO, considering the impact the arrangement has had on the domestic bond market so far. 

   He also underscored the urgency for State governments to diversify their revenue base away from over reliance on oil in order to live up to their obligations while achieving the developmental objectives for their people.

   Gwarzo also stated that the management is working to empower SROs and trade organisations to enable them handle some complaints cases and dispatch adding that the strategy of the management is not to create committees but to focus on prescriptions and ensuring that they are executed within reasonable time frames.

    “We have finished the rules on complaints management framework and very soon, it will be exposed. One of the highlights is to allow complaints to be managed at the lower level” he said.

    Gwarzo , who pledged its commitment to ensure that the market remains vibrant in order to attract investors both locally and internationally, added that the current management would strive to develop domestic investment from retail and institutional investors

    He added: “We will step up to reach out to the market and improve investment. On the international side, what is most important is the enabling environment. Right now the rules are very friendly and that is why we keep changing them from time to time to suit best practices and attract investors.

   The President of the association, Mrs Funmi Ekundayo commended SEC’s leadership for various initiatives aimed at developing the capital market. 

   She assured the commission of their continued support and cooperation as a trade group in the quest to move the market to the next level. “Our role as protectors of the investor cannot be overemphasized. In compliance with our responsibilities within the Trust Deed we ensure that investors are always protected and repaid as and when due. We are happy with the support you give us which has continued to strengthen investor confidence in the market” she said.