Capital market: Senate proposes bill to strengthen sector
A bill for an Act to facilitate the development of Nigeria’s capital market, known as Demutualization Bill), has scaled the second reading on the floor of the Senate on Tuesday.
The capital market, a critical segment of the Nigerian financial sector, includes, The Security and Exchange Commission, SEC, The Nigerian Stock Exchange, NSE, Stock broking firms, Registrars and Issuing Houses.
The Bill, according to the lawmakers is seeking to enable the conversion and re-registration of the Nigerian Stock Exchange, NSE, from a company limited by guarantee to a public company limited by shares and for other related matters.
Acting Chairman, Senate Committee on Capital Market, Senator Foster Ogola (PDP Bayelsa West), who presented the Bill for consideration, said the proposed demutualization of The Exchange was an integral element of the 10-year Capital Markets’ Master Plan; and it underpins the rapid growth that is envisioned over the next decade.
He said the Bill, if signed into law, would result into an increased value of the exchange, enabling it to compete favourably in the global market, open the doors for significant investment into Nigeria and ultimately enhance the nation’s capital market.
He said, “The demutualization of the Exchange will bring the Nigerian capital market at par with other international jurisdictions, result in enhanced governance, transparency and visibility, whilst attracting strategic partners, investors and good quality issuers”.
Ogala added, “the approval of the demutualisation bill will generate substantial motivation for the development of an agile Exchange thereby consolidating its innovativeness and strengthening its leadership both at local and international levels whilst also adding value to its stakeholders.
“As a demutualized entity that is profit-seeking, the NSE will be in a better stead to capitalize on new income opportunities, free from any limitations arising from conflicting member interests and existing laws and more importantly be able to better support the economic growth of Nigeria”, Foster added.
Senator Mao Ohuabunwa, (PDP Abia North), while seconding the motion on the Bill called for expeditious passage, stressing that the demutualization when implemented, would give the Exchange the ability to take a number of strengthening actions, that would promote transparency and increase efficiency in its operations.
‘The demutualization holds a number of significant benefits for the Nigerian economy, including augmentation of Nigeria’s debt profile, increase capital raising capabilities, capital support for government initiatives, attraction of foreign and local investors and assisting corporate and financial institutions to raise capital.
The Bill, however, enjoyed unanimous support of majority of the Senators, when the Senate President, Senator Bukola Saraki put it to vote.
The Bill was sent to Senate Committee on Capital Markets for further legislative action.
The committee now has four weeks to report its findings to the Senate at Plenary.
Olufemi Samuel, Abuja
