SEC DG Advises Nigerian Lawyers to Refrain from Shielding Clients Involved in Market Infractions

Mounir Gwarzo, Director General, Securities and Exchange Commission (SEC) Nigeria

August 22, 2017/SEC

The Director General of the Securities and Exchange Commission Mr. Mounir Gwarzo serving as a discussant at a Break out session (Creating Secondary Market For Investors) of the Annual General Conference of the Nigerian Bar Association, urged legal practitioners to refrain from instituting unnecessary litigations at the instance of their clients who are involved in an enforcement action of the Commission.
Making this plea, he added that this would ensure the support of the Legal profession to the Commission, thereby allowing the Commission to perform its statutory function and adequately protect investors with the aim to continuously develop the Nigerian capital market and the economy in general.
To relate his plea to the audience, he drew their attention to a quote of Ngwuta JSC in JOSHUA CHIBI DARIYE vs. FEDERAL REPUBLIC OF NIGERIA (2015) LPELR- 24398 where the learned Justice of Supreme Court stated that although lawyers owe a duty to their client, they however owe a higher duty to a higher cause; which is the cause of justice.
He also encouraged law firms to merge into large firms that would possess the capacity to be listed on the floor of a Securities Exchange. This submission was re-echoed by Mr. Oscar Onyeama, The CEO of the Nigerian Stock Exchange (NSE). On a lighter note the Director General solicited legal practitioners to invest in the Nigerian capital market.
In the course of discussions, Mr. Colin Coleman, Managing Director of Goldman Sachs South Africa observed the high quantum of transaction cost in the Nigerian capital market. Reacting to this, the Director General (SEC) as well as the CEO of the NSE emphasized that steps have been put in place to ensure a reduction of both the explicit and implicit cost of transactions in the Nigerian capital market.
The DG acknowledged that “both explicit and implicit costs in Nigeria are higher than in peer countries”. He stressed that within a short period of time the market would feel the effect of these reductions.
To start with, there will be a hair cut on SEC, NSE, Issuing Houses and Receiving Agents fees at the primary issuance side. The four cost centers charge about 70 – 80% of floatation cost. The commission will be addressing the secondary market as well.

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