SEC secures funding for securities market surveillance

Problems associated with market infractions may become a thing of the past as the Securities and Exchange Commission (SEC) has announced that it has obtained donor funding for acquiring and deploying a securities market surveillance system.

The Director General of the SEC, Lamido Yuguda, disclosed this while fielding questions from journalists on the outcome of the second capital market committee (CMC) virtual meeting at the weekend.

Securities market surveillance system monitors and detects activities for market manipulation, fraud, behavioural patterning, and more across all asset classes and all products, thereby ensuring the prevention and investigation of abusive, manipulative or illegal trading practices.

Recall that regulators’ poor handling of infractions and enforcement of discipline among operators has been blamed for scandals perpetrated in the stock market over the years.

Investors also believed that the SEC’s inability to upgrade its operational guidelines through the use of modern information technology (IT) facilities to monitor day-to-day market operations, especially the trading platform, will continue to undermine efforts to restore confidence in the market.

The introduction of a market surveillance system in the market is expected to aid in detecting market infractions, as well as addressing market abuse as quickly and efficiently as possible to strengthen investors’ protection.

Yuguda said: “The deployment of the surveillance solution will improve the commission’s regulatory and supervisory capabilities over securities trading activities and help modernise the local capital markets, ensure market integrity and transparency across all trading platforms, and boost investor confidence.”

In addition, the SEC boss also stated that it is working to ensure it reduces the level of unclaimed dividends to zero per cent in the financial market even despite the country’s unclaimed dividend currently standing at N177 billion.

He reiterated that the commission’s resolve to sanction capital market operators (CMOs) frustrated the electronic dividend mandate process.

Yuguda said the unclaimed dividends figure, which was estimated at N168 billion as of December 31, 2020, had risen to N177 billion as of the end of 2021.

“The SEC has done a lot in terms of working with registrars to ensure dividends are distributed electronically through bank accounts. The problem is that some investors are yet to mandate their accounts.

“Right now, we are working on trying to get to a one-stop point and not different registrars so that the level of unclaimed dividends gets to zero per cent.

“Also, companies have changed their names and this is making it difficult for a large number of investors to be unaware of this and this has made them not have their accounts mandated.

“The commission will however continue to create awareness in this regard. Capital market operators must also do more to demonstrate, through their activities, an efficient capital market that prioritizes the interests of investors,” he said.