Gbajabiamila hinges sustainable economic growth on efficient capital market

Speaker of the House of Representatives, Femi Gbajabiamila has described the capital market as an avenue to increase assets and wealth creation, stating that efficient operations of the market is essential to a nation’s sustainable growth.

At a Public Hearing call/submission of memoranda on the Investments and Securities Bill, alongside the Chartered Institute of Stockbrokers Bill held in Abuja on Tuesday, Gbajabiamila pointed out that capital markets also provide funding for new and existing businesses to innovate, expand, adapt to market changes, as well as allow small and large scale investors to contribute to the growth of enterprises, thereby creating wealth for economic development.

Represented by Peter Akpatason, Gbajabiamila said: “Both bills for consideration today are in keeping with our commitment to the legislative agenda of the ninth House of Representatives to pursue far reaching reforms of critical insti

“Our ultimate goal is to ensure that these institutions are properly grounded to perform their functions, execute their mandate and serve the best interest of the Nigerian people.”

He pointed out the need to ensure that the operations of the capital market and the entire industry sector are sufficiently fair and transparent to ensure investor confidence is particularly of concern.

“It is often said that capital is cowardly and will run at the slightest risk. In this new global economy, when investors have the option to quickly move money across industries, nations and countries, we cannot allow deficiencies in the system that cause investors to worry about the safety of their investments.

“I am delighted that many industry stakeholders have convened in this Public Hearing today to participate in this public hearing and I urge you to take full advantage of this public hearing to make well thought out contributions so that final legislation that emerges from this process can adequately reflect the talents and expertise of the men and women who operate and regulate the capital market in Nigeria,” he added.

In his remarks, Chairman of the House Committee on Capital Markets and Institutions, Babangida Ibrahim said the ISA Bill seeks to repeal the existing Investments and Securities Act 2007 and critical in establishing a new market infrastructure and wide ranging system of regulation of investments and securities businesses in Nigeria especially in the areas of derivatives, systematic risk management, financial market infrastructure and Ponzi scheme and platforms.

Other areas the bill seeks to address are alternative trading systems, inclusion of National Pensions Commission as part of the board of the Securities and Exchange Commission, deletion of the provisions on merger control in the current Act and amendment of the criteria of borrowing by sub nationals and strengthening and enforcement powers of the Securities and Exchange Commission in line with the requirement of the International Organisation of Securities Commissions (IOSCO).

He said the Bill is also essential in determining the type of training required of an operator to perform professional functions in the capital market and also provide certification for persons deemed to have met the qualifications standards.

“The Act will achieve transformation of the market, from manual to automation, from manual to multiple securities exchanges, influx of foreign professionals into the country and also need to harmonise standards. The bill will also achieve expansion of products range in the market, equities, bonds, sukuk, derivatives and an advent of electronic share issuance.

“Occasions such as this give us an opportunity to brainstorm, work together and proffer solutions on challenges within the capital market. The Securities and Exchange Commission as regulators of the capital market are saddled with responsibilities of ensuring a well regulated capital market, one that is dynamic, fair, transparent and efficient for the nation’s economic development” He stated.

Ibrahim assured that the House of Representatives and Committee on capital market are committed to ensuring that the SEC delivers on its core mandate of due registration of the players in the capital market, market integrity to avoid systemic risk, guarantee inspection, investigation of breaches, due surveillance, market development and law enforcement and rules making.

“This committee is indeed proud of these bills as they seek to ensure a more robust, vibrant, prosperous and more developed capital market and also to ensure that the capital market is well institutionalised and accountable.

“We hope the resources of Nigerians in the capital market will remain safe, accountable and prosperous. The capital market is a veritable tool for wealth creation and we will ensure this is true for Nigerians. If there was any time we need to rally for the economic good of Nigeria it is now and this is the time”.

Also speaking, Director-General of SEC, Lamido Yuguda stated that having operated the current enabling Act since July 2007, the commission has observed areas requiring review in order to strengthen existing provisions, remove ambiguities, introduce new provisions that would enhance the international competitiveness of the Nigerian capital market and reposition the market to catalyze National economic transformation.

Yuguda said, “Given the market’s evolution since the passage of the ISA 2007, it was the consensus of the major stakeholders in the capital market community that a complete overhaul of the ISA through a new Bill is necessary in order to achieve the objective of consolidating the efficiency, transparency and viability of the market.

“It is also noteworthy that the Nigerian Capital Market Masterplan (2015-2025), which was launched by the Commission in 2014, strongly recommends the holistic strengthening of the Legal and Regulatory Framework underpinning capital market operations.

“The Commission is delighted to state that the Investments and Securities Bill 2022 enjoys the overwhelming support of stakeholders in the Nigerian capital market. There is a collective resolve in the capital market community to work together towards the enactment of this Bill during the life of the 9th National Assembly”.