SEC Engages CBN on Renewed Margin Lending

L-R: Mary Uduk, Acting Securities and Exchange Commission and Isiyaku Tilde, Acting Executive Commissioner, Operations, SEC at the First Post Capital Market Committee Meeting Press Briefing in Lagos on Friday. Photo Credit: Proshare

March 22, 2019

By Paschal IJEH InvetAdvocate

Lagos (INVESTADVOCATE)-The Securities and Exchange Commission (SEC) on Friday said it has commenced engagement with the Central Bank Nigeria (CBN) on margin lending, Mary Uduk, acting director general (Ag DG) of the Commission disclosed at the post Capital Market Committee (CMC) meeting press briefing .

“Deliberations are still ongoing on the inclusion of bank shares in the margin list,” she said.
Isiyaku Tilde, acting executive commissioner, Operations at the Commission while responding to questions on possibility of the desired result in the ongoing discussion with the CBN on the margin lending said SEC was aware of the zero activities; following the rules guiding margin lending since its introduction in 2008 post-financial crisis era.
According to Tilde, the expectation of SEC is that after all necessary things has been put in place to prevent previous negative experience, the aim is to get the segment of the market active. “Parts of the areas to look out for includes risk base and capacity of participating operators,” he added.
Also, Uduk disclosed the Commission has made progress in attempting to resolve the issues around transmission of shares related to the estate of deceased investors. “This process has commenced with the Lagos State Probate Registry and the Commission, with the support of relevant stakeholders,shall carry out an engagement/enlightenment programme for the probate registry,” the SEC Ag DG said.
Other highlights of the CMC meeting, according to Uduk is that the market wide committee on identity management and account validation for transactions in the capital market was enjoined to fast track its activities. “In furtherance of this initiative, the Commission is to engage the CBN to facilitate the validation process through NIBBS,” she added. 
“As part of our efforts to ensure successful implementation of the complaints management framework, the Commission has ensured that all Trade Groups are duly registered. The Commission therefore is working on institutionalizing periodic meetings with the heads of trade groups to define their roles and address their challenges,’ Uduk affirmed.
On the E-IPO, the SEC acting DG said the capital market community recognizes the importance of the E-IPO project to improve issuance processes and encourage more investor participation. “The draft framework for its implementation has been developed and presented at the CMC meeting. The SEC has exposed the framework and rules guiding the E-IPO, and stakeholders now have up till Friday, March 29, 2019 to review and send their suggestions for improvement,” she disclosed.
Uduk further affirmed that technical committee would be constituted to address mutual issues of concern between the SEC and the Corporate Affairs Commission (CAC). “The existence of a harmonious relationship between the Commission and the CAC is very vital to the development of the Nigerian capital market,” the SEC DG said.
“To showcase the immense potentials of the commodities ecosystem to the economies of sub-nationals, the Commission, in collaboration with the commodities ecosystem implementation committee, is planning activities to sensitize members of the Nigerian Governors Forum, especially now that general elections are over. To this end, an international conference is being proposed to hold in September 2019, with experts from within and other jurisdictions expected to be in attendance,” Uduk said.
She also disclosed the market was informed of some successes recorded thus far in the regularization of multiple share subscription. “Through this exercise, some Nigerian investors in diaspora have been able to consolidate their shareholding accounts. Similarly, several local investors with numerous accounts have also been able to consolidate their investments,’ she noted.  

Uduk affirmed the year 2019 promises to be an interesting one for the Nigerian capital market as the Commission shall undertake a review of the 10-year Nigerian Capital Market Master Plan. “This review is intended to align the master-plan with current realities on macroeconomic, political and market development fronts. Meanwhile, the Commission has approved the rules on Green Bonds, and would in the nearest future introduce the rules on derivatives trading. We believe all these are necessary to move our sector forward,” the SEC Ag DG said. 

She added as part of SEC’s efforts to ensure successful implementation of the complaints management framework, the Commission has ensured that all Trade Groups are duly registered. “The Commission therefore is working on institutionalizing periodic meetings with the Heads of Trade Groups to define their roles and address their challenges,” Uduk disclosed.

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