The Acting Director-General, Securities and Exchange Commission, Ms. Mary Uduk, speaks on measures being taken to protect investors in the Nigerian capital market, in this interview with journalists in Abuja. IFEANYI ONUBA reports
Last month, the Securities and Exchange Commission hosted the first Capital Market Committee Meeting, what were some of the highpoints of the meeting?
The CMC over the past 18 years has proved to be an important platform that brings together stakeholders of the capital market to discuss issues germane to the development and orderly conduct of the market. During the meeting, the new executive management solicited the support of all stakeholders and acknowledged the enormous challenges before us and expressed our commitment to ensure that we deliver on the mission and vision of the commission.
We discussed the commission’s efforts in collaboration with the National Educational Research and Development Council to institute a stand-alone capital market curriculum for basic and senior secondary education in the country.
To this end, trade groups made commitments at the meeting to support this initiative. the technical committee working on developing a vibrant commodities market for Nigeria presented its report at the meeting. We agreed that the report will be exposed to the public to elicit comments and inputs from all stakeholders.
The commission also updated the market on the status of its database registration exercise for Capital Market Operators. The SEC website now has a list of all CMOs and their functions. Stakeholders were also informed that the Commission has issued a new set of registration certificates to operators without expiry dates and these are available at our head office and Lagos Zonal Office.
The CMC noted that the distribution of electronic annual accounts of public companies had commenced. However, we also received feedback on concerns from some shareholders associations. It was resolved that the market would deliberate further on the matter while the pilot period of one year would be allowed to go on.
There have been concerns being expressed about the non-listing of some companies’ shares on the stock exchange, what is SEC doing about this?
In as much as the capital market will like to attract as many companies as possible, the decision to be listed rests with the individual companies. All we do is to encourage companies and let them see the benefits of being listed. However, all public companies, whether listed or not, are expected to register their securities with the commission. We also have rules stipulating that shares of public companies can only be transferred on SEC-approved trading platforms/exchanges. Thus, even when a company delists, its shares can still be traded on, say, NASD OTC Plc.
In addition, the commission is liaising with the Corporate Affairs Commission to ensure that companies comply with registration of their securities and exchanging such securities only on SEC-approved platforms.
The commission constituted a committee on listing; what are some of the roles to be played by the committee in line with the current capital master plan of the commission for the capital market?
The mandate of the committee is to drive advocacy and other activities towards increasing the number of listed companies on our exchanges. Their broad terms of reference are to propose strategies to attract listings from target sectors; undertake relevant advocacy as well as other activities that may be relevant to the achievement of this mandate.
The new mandate given to that committee is to find out why a number of companies are delisting. Are there regulatory issues? Is it that they have issues with compliance with our regulations? We have given them a mandate to come up with recommendations so that if we need to amend our rules to attract more listing we will look at international best practices and do that. If we have to talk to other government agencies and stakeholders, we will equally do so.
The issue of transparency is vital to the growth and development of the capital market; what would the new SEC management be doing differently to boost investors’ confidence?
Members of the new management team have worked in the commission for many years with experiences in different departments and aspects of the capital market. We have always been part of the commission’s efforts at improving investors’ confidence and implementing the capital market master plan.
The master plan will continue to be our working document and we shall continue to implement initiatives that will promote investors’ confidence such as e-dividend registration, Direct Cash Settlement, dematerialisation, complaint management framework, financial literacy and investors’ protection fund.
Last year, the commission commenced the e-dividend registration which was done for capital market investors up until March 31. Now that the free registration exercise has ended, what is the new direction for the initiative?
It is important to state that e-dividend registration has not ended; it is free registration that ended on March 31, 2018. Before the deadline, the commission was bearing the cost of registration, but the new direction now is that banks and the NIBSS (Nigerian Interbank Settlement System) along with registrars will charge a token of N150 per mandate. We are still soliciting the cooperation of the public to key into electronic dividend payment as this is what will address the fundamental issue of unclaimed dividend.
What is the total number of approved mandates so far under the e dividend initiative?
As of end of March 2018, the total approved mandates were 2.49 million, translating into 466,000 unique investor accounts.
There seems to be a lull in the Initial Public Offering segment of the capital market. What is SEC doing to promote electronic IPO?
Globally, capital markets are moving towards electronic IPOs and the Nigerian capital market is working to adopt this trend. A committee was set up during the meeting comprising the Securities and Exchange Commission, Nigerian Stock Exchange, Association of Issuing Houses of Nigeria, Association of Stock Brokers, Central Securities and Clearing System, Institute of Capital Market Registrars, Capital Market Solicitor Association, Fund Managers Association of Nigeria, and the NIBSS.
Recently, the commission announced the extension of multiple subscriptions and forbearance. What is the update on this?
On multiple subscriptions and forbearance for shareholders with multiple accounts, the forbearance window has now been extended to September 2018. Registrars have acknowledged that investors have started coming forward but there are still some challenges in the process. The CMC deliberated and recommended the appropriate technical committee to seek input and come up with recommendations to address these challenges. Therefore, we encourage all affected investors to come forward and take advantage of the window before the new deadline.
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