SEC Approves N1.5trn for Five Infrastructure fund shelf programs
As a major step in aligning with and directly supporting the Federal government’s infrastructure development goals, the Securities and Exchange Commission(SEC) has approved five infrastructure fund shelf programs totalling ₦1.5 trillion.
The Director General of the Commission, Lamido A. Yuguda disclosed this at the post first 2024 Capital Market Committee(CMC) meeting virtual media interaction held on Friday.
He also said that the Commission actively supported the growth of the Fund Management industry in 2023 with approvals for new mutual funds (₦18.20 billion) and discretionary/non-discretionary investment products (₦17.60 billion).
Recall that the Nigerian Capital Market Committee (CMC) convened its first meeting of 2024 on April 18, 2024, where it emphasized commitment to fostering a thriving capital market environment.
“The meeting was attended by over 345 capital market operators and stakeholders, and we had very robust deliberations”, he said
He said the meeting focused on critical matters affecting the Nigerian capital market, including the current global and domestic economic climate, along with recent developments and regulatory initiatives.
In his opening remarks, the Chairman of the CMC provided an assessment of the global economic landscape, acknowledging the headwinds faced by the global economy in 2023, including the pandemic’s lingering effects, rising inflation, and geopolitical tensions.
He highlighted the impact of this slowdown on African financial markets, including the depreciation of African currencies and a decrease in total market capitalization.
On the domestic front, the Chairman expressed optimism that the recent actions of the Monetary Policy Committee (MPC) have led to the recent uptick in the value of the naira. The meeting also expressed its support for the Central Bank of Nigeria in its efforts at strengthening the naira and combating inflation.
The Chairman of the CMC informed of the significant achievements in the Nigerian capital market during 2023. Trading activity in equities and bonds increased, with the NGX All-Share Index reaching a high of 45.90% and the FMDQ Sovereign Bond Index a reasonable 8.79% return. Activity on the NASD exchange also rose significantly, with volume and value rising by 34.08% and 24.18% respectively.
The CMC Chairman reported the positive milestones in the Commodities Sector with AFEX and the Lagos Commodities and Futures Exchange witnessing increased volumes and values traded in agricultural commodities. AFEX reported a significant uptick in both the volume and value of agricultural commodities traded by 34.79% and 47.84% respectively. The Lagos Commodities and Futures Exchange also recorded an upswing with Agro-commodities accounting for over 96% of total turnover.
In line with the Commission’s drive to ensure actualisation of the target of the Capital Market Masterplan on Financial Technology (FinTech), the Commission amended rules governing digital assets and established a Digital Exchanges (DEX) Division dedicated to the supervision of all duly licensed digital asset platforms.
On Market Supervision, the Chairman reported that the commission has intensified its supervisory efforts, focusing on fund managers and conducting inspections to address vulnerabilities and enhance stability. This has resulted in the implementation of a number of corrective measures designed to strengthen the overall health and stability of the fund management industry.
Progress was reported on implementing Anti-Money
Laundering/Combating the Financing of Terrorism (AML/CFT) regulations and addressing deficiencies identified in the Financial Action Task Force (FATF) Mutual Evaluation Report. The Commission has been working with the nation’s regulatory and law enforcement agencies to ensure that Nigeria is taken off the FATF grey list.
The Chairman informed the Committee that a robust risk management and internal control framework has been put in place for the National Investor Protection Fund (NIPF) and that operations will begin this quarter.
Initiatives to promote investor education, particularly among younger Nigerians, and leverage digital platforms for broader market participation, were highlighted.
The Chairman commended the successful launch of a new e-Dividend Mandate Management System (eDMMS), making it easier for investors to mandate their accounts for electronic dividends. The link to the portal can be found on the SEC’s website.
The Chairman told the Committee that work continues on ensuring passage of the Investments and Securities Bill 2024 and that implementation of the Revised Capital Market Master Plan (RCMMP) remains ongoing.
The Chairman announced two engagements that would hold next month – launching of the Securities Issuers Forum to discuss attracting more issuances to the market and a roundtable on leveraging crowdfunding to support MSMEs.
The SEC commended the CBN for the recently announced policy on bank recapitalization and noted that the Commission has drawn useful lessons from the previous bank recapitalization exercise and will very shortly issue appropriate guidelines to facilitate an efficient capital raising process in the present exercise. The Commission committed to a process that will ensure speed, fairness, and good market conduct. The SEC is collaborating with the Central Bank of Nigeria (CBN) and other relevant agencies to ensure a smooth process.
He noted that the capital market is strong, efficient and resilient stressing that over the past few quarters, some large companies have raised significant financing from the market signifying the depth and ability of the market to provide such financing.
“We are confident of the ability of the market to provide the needed funds in the banking recapitalization”, he said.
He underscored SEC’s commitment to embracing FinTech innovations while managing associated risks and establishing a regulatory framework for the digital asset space.
