We Must Eliminate Deficiencies In Capital Market, Protect Investors — Reps - Mc Ebisco We Must Eliminate Deficiencies In Capital Market, Protect Investors — Reps - Mc Ebisco

We Must Eliminate Deficiencies In Capital Market, Protect Investors — Reps

The House of Representatives’ Speaker, Femi Gbajabiamila, on Tuesday said the legislature cannot allow deficiencies in the capital market that cause investors to worry about the safety of their investments.

The speaker, who stated this while declaring open a public hearing organised by the House Committee on Cap­ital Market and Institutions, said, “In this new global econ­omy, investors have the option to quickly move money across industries, nations and conti­nents.”

Represented by Peter Akpa­tason, the House Deputy Ma­jority Leader, Gbajabiamila said capital markets provide access to funding for new and existing businesses to inno­vate, expand, adapt to market changes and thrive.

The hearing was on two bills seeking to enhance the operation and performance of the capital markets in Ni­geria with the overall aim of engendering economic devel­opment.

They are ‘A bill for an Act to repeal the Investment and Security Act, 2007 and enact the Investments and Securities Bill to establish Securities and Exchange Commission as the apex regulatory authority for the Nigerian capital market as well as regulation of the market to ensure capital for­mation, the protection of in­vestors, maintain fair, efficient and transparent market and reduction of systematic risk and for related matters’, and ‘A bill for an Act to repeal the Chartered Institute of Stock­brokers, CAP. C 9 Law of the Federation of Nigeria 2004 and provide for establishment of Chartered Institute of Secu­rities and Investments and related matters.’

The speaker said, “The cap­ital markets also allow small and large-scale investors to contribute to the growth of enterprises and, by so doing, increase the values of their as­sets and create wealth. There­fore, it is abundantly evident that the proper and efficient operation of the capital mar­ket is essential to sustainable national economic growth.

“Both bills for consider­ation today are in keeping with our commitment in the legislative agenda of the 9th House of Representatives to pursue far-reaching reforms of critical institutions in our country. Our ultimate goal is to ensure that these institutions are properly grounded to per­form their functions, execute their mandates and serve the best interests of the Nigerian people.

“The need to ensure that the operations of the capital markets and the entire in­dustry sector are sufficient­ly fair and transparent to ensure investor confidence is of particular concern. It is often said that capital is cowardly and will run at the slightest risk.”

In his welcome address, Hon. Babangida Ibrahim, the chairman of the committee, said the House and the pan­el are determined to ensure Securities and Exchange Commission (SEC), which regulates the capital market, delivers on its core mandates to ensure due registration of players in the capital market, market integrity, avoid system­atic risks, guarantee inspec­tions, amongst others.

“The House Committee on Capital Market and Institu­tions, which I humbly chair by the grace of Almighty Allah and the choice of the House, led by our own Speaker, Rep. Femi Gbajabiamila, is indeed proud of these bills as they seek to ensure a more robust, vibrant, prosperous and ac­countable capital market and also to ensure the capital mar­ket is well institutionalized and accountable.

“Indeed the House has in­vested huge time and resourc­es in coming up with these 2 bills which we hope will ensure the resources of Ni­gerians in the capital market remain safe, accounted for and prosperous. The capital mar­ket is a laudable tool for wealth creation, and we as representa­tives of the people will ensure this is true for Nigerians.”

Similarly, stakeholders in their presentations threw their weights behind the bills particularly, the proposed leg­islation for a provision that the investor protection fund set up by securities exchanges would compensate investors who suf­fer pecuniary losses arising from the revocation or cancel­lation of the registration of a dealing member firm.

The stakeholders also ex­pressed delight over the pro­vision in the bill prohibiting ponzi/pyramid schemes as well as other illegal invest­ment schemes and prescribed a jail term of not less than 10 years for promoters of such schemes.

In a presentation, Lamido Yuguda, the Director Gener­al, Securities and Exchange Commission (SEC), said Ni­geria needs and deserves an internationally competitive and well-functioning capi­tal market to facilitate the on-going economic diversi­fication and passage as well as enactment of the Invest­ments and Securities Act 2022 will be a pivotal step in that direction.

“This bill contains an en­tirely new part which provides for the regulation of Commod­ity Exchanges and Warehouse Receipts. These provisions are essential to allow for the devel­opment of the entire gamut of the commodities ecosystem.

“The bill contains provi­sions which address the exist­ing restrictions in respect of raising of funds from the cap­ital market by sub-nationals to allow for greater flexibility in this regard.

“Some provisions in the ISA 2007 pertaining to the com­position of the tribunal, func­tions of the minister, vacancy, constitution of the tribunal, qualification and appointment of the Chief Registrar as well as the jurisdiction of the tribu­nal have been amended in the bill to enhance the ability of the tribunal to optimally dis­charge its mandate.

“It is a well-known fact that efficient capital markets are indispensable to the func­tioning of a modern economy. No economy can achieve any meaningful advancement without the important role capital markets play in sup­plying medium to long term finance,” Yuguda said.

Olawale Adeosun, the President of the Chartered Institute of Stockbrokers who also spoke in support of the bill said: “In view of our various engagements with the Securities and Exchange Com­mission with respect to this bill, the Chartered Institute of Stockbrokers hereby ex­presses its utmost confidence in the National Assembly and this committee to do utmost to facilitate the expeditious pas­sage of the bill.”

In their various presenta­tions, representatives of the NGX, Issuing Houses of Ni­geria, Association of Security Dealers, among others, also supported the proposed legis­lation.

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