FG affirms SEC as sole approving authority for securities issuance

The director-general of the Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, has reiterated SEC’s obligation as the sole authority for approving securities issuance for capital raise in the nation.

While noting that SEC was a government agency mandated to regulate and develop the Nigerian capital market, he regretted that it had been relegated for the Debt Management Office (DMO) in time past, whenever the federal Government needed to raise funds for developmental projects.

However, the Minister of Finance, Mrs. Kemi Adeosun, has declared that SEC had the sole responsibility for the supervision, regulation and approval of issuance of securities in the local market for Nigeria’s internal debt.

In a circular recently, the minister noted that in pursuance of its powers as conferred by the Investment and Securities Act No. 29 of 2007(ISA) and the Rules and Regulations of the Securities and Exchange Commission made pursuant to the ISA (the SEC Rules), the Securities and Exchange Commission(SEC)  shall continue to have and discharge the sole responsibility for the supervision, regulation and approval of the issuance of such securities in the local market by Federal, Government Agencies, State and Local Governments, their Agencies and Corporations.

“Henceforth, all applications in relation to the issuance of such securities by any of the aforementioned entities shall be made to the SEC for review and approval,” the circular emphasized.

Mrs. Adeosun added that this clarification became necessary in recognition of “the need to engender proper management and coordination of Nigeria’s internal debt through issuance of securities in the local market and to promote better fiscal responsibility.”

It further stated that in discharging its responsibility, SEC shall collaborate with the Office of the Accountant-General of the Federation, the Federal Ministry of Finance and the Debt Management Office in carrying out a debt sustainability analysis with a view to encouraging fiscal responsibility by the various tiers of government, and thus promoting an efficient sustainable capital market which engenders investor confidence.

The Circular concluded that “The final approval for such securities issuance shall be granted to the relevant applicant government or agency by the Securities and Exchange Commission subject to a satisfactory debt sustainability analysis and compliance with the Fiscal Responsibility Act 2007, the ISA and SEC Rules.”