The Securities and Exchange Commission (SEC) Capital Market Committee (CMC) has sustained effort at building a formidable market. However, the commission’s effort continues to encounter resistance thereby limiting accomplishments.
The commission, through the CMC, has however laid out many good initiatives, such as review of the market laws, e-dividend registration, stoppage of cheque, e-dividend payment, Direct Cash Settlement (DSC), commencement of capital market studies in schools, and increasingly boosting investor education, among others.
However, one outstanding feature of impressive work of the CMC is hinged around boosting investors’ confidence; and it is expected that assimilation of this message by Nigerians and the global investing public, will finally drive other initiatives of the market.
Daily Times Nigeria recalls that at the immediate past post CMC meting press briefing in Lagos, it was revealed that the revised and amended market rules had been forwarded to the national assembly to passage.
It would be recalled that the current Speaker of the House of Representatives, Honorable Yakubu Dogara, when he led the House committee members on capital market in 2016, alluded that the house committee has reviewed market rules, one of its contribution to market development.
Director General, Securities and Exchange Commission, Mounir Gwarzo said that the commission has continued to enhance market rules, as the amended market guidelines has been delivered to the National Assembly; and is expected to pass first and second reading very soon.
Irrespective of the assurance by the SEC DG, fears abound that the assembly currently engrossed in political networking for election and re-election may have preferred to address urgent national issues to passage of market bills, which may not generate such lobbying that political intrigues heralding general elections, command.
On the market’s commitment to boost economy through agriculture, Gwarzo said that the commission is committed towards the government’s effort at diversifying the economy through agriculture through efficient mobilisation of commodities exchanges.
According to the SEC DG, supporting the government’s effort at diversifying the economy through the commodities’ exchanges would ensure enhanced agricultural development through right standardization and global quality compliance along agricultural value chain.
However, Daily Times findings showed that has recorded its share of trust deficiency, as it has been highly publicized that the celebrated government’s anchor borrowing programme has been hijacked by politicians and their stooges.
Also, the lack of transparency in the government’s yam export programme, which was hurriedly executed, of which it was later reported that the tubers of yam that were said to have been successfully exported from the country, were turned back as spoilt yam cargo, and no one yet has claimed responsibility for the colossal loss to the country.
Yet, it is the same agricultural ministry that is expected to partner SEC towards ensuring standards and quality of the commodities to be traded by the emerging commodities exchanges.
The commission, irrespective of its avowed commitment to boost electronic dividend payment, acknowledged that its effort in this space has not been generating appreciable result due to slow rate of compliance with the ongoing electronic dividend (e-dividend) registration process.
“There is slow pace in e-dividend registration. In the last three months, there has not been an increase in the registration, which is why we decided to have conversation with Registrars and banks, Gwarzo said.
The director general said that the commission in the course of the parley with stakeholders in the e-dividend registration to ensure embrace the programme, identified that some investors do not have Banks’ Verification Numbers, BVN,
and to address that “we reached an agreement that they should be treated on the basis of their signature and other data, pending when they regularize their BVN.
According to him, based on the ongoing discussions and solutions to identified problems, it is expected that the e-dividend registration portal would witness increased participation in the remaining months of the year, as more and more people are expected to take advantage of the free registration.
The free registration, he said, expires by 31st December 2017, after which such registration will attract N150 service charge, also the DG SEG emphasized that issuance of dividend warrants will also end on 31st December, 2017.
“As at the end of December 2017, any Nigerian that wants to register for BVN will have to pay N150 service charge. There is also challenge posed by decreasing low compliance with ongoing Direct Cash settlement (DCS) registration.
According to the Nigerian Interbank Settlement Systems (NIBSS) the e-dividend registration since inception has captured a total of 2.247,176, as at the end of October 2017, leaving a mass of over 3 million, hence the Nigerian market is estimated to have over five million investors.
The lull renewed investor’s apathy to endorsing electronic dividend which also supports direct cash settlement (DCS), has been attributed to many factors, including the challenge of processing the documentations,
failure of some banks to collect e-mandate forms, the Diaspora investors’ challenge, irregular signatures and dearth of investor confidence among other factors.
According to the SEC DG, because of the enabling commodities exchanges, the yam export initiatives embarked upon by the government through the ministry of agriculture was unsuccessful, hence most of the yams billed for export due to poor standard spoilt in the course of the export and was returned to the country.
“‘The only way farmers can be able to produce more is to have good pricing for their commodities”
On the poor liquidity system prevailing in the market, he assured that the commission was still exploiting avenues that market operators will have liquidity which would be deployed to boost the activities.
On the compliance by capital market operators on the rule mandating them to update their data, he said that the commission has done well towards enhancing and updating data of all market operators
as he also assured that any market operator that fails to update his data, or provide remaining information to complete his data portal, may have his operating license suspended.
Mr. Samuel Oluyemi of the Nigerian Interbank Settlement Systems (NIBSS), recalled that the e-dividend registration has been recording progressive report month on month until the recent lull, which he said falls below the expectation of the SEC DG.
According to him, the e-divided registration dropped from 59,214 in September to 37,153 in October 2017, adding that the decline in new registration irrespective of the free registration approved by the SEC,
was not in line with expectations of the SEC DG, and to ensure that the dip is not sustained in November and December, the commission initiated meeting with stakeholders to arrest the development.
He said that campaigns have been intensified in local languages across multi media outlets to educate people on the need to key into the e-mandate as well as encourage them to register to be able to have the full benefits of their investments in the Nigerian capital market.
The CEO United Securities Limited, Mr. Seyi Owoturo said that in the course of meeting with registrars and banks to address poor compliance with e-dividend registration,
said that it was identified that banks turn away investors with e-dividend registration forms , simply because the bank’s branch is tagged cash centers” and not empowered to perform other functions.
“What we did was to mandated them to take collect he forms from the shareholders and forward the document to their nearest branch that performs such functions.
According to him, it was also discovered that Diaspora investors have the challenge of registering for the e-dividend mandate and has gone a step further to ensure that more people take the advantage to register.
Irrespective of the identified challenges, he still maintained that “the deadline is sacrosanct, we have to keep to the 31st deadline for end to issuing dividend slips or cheques, and we will not extend the underwriting.”
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