SEC hopeful CBN may open liquidity window for market operators

The Securities and Exchange Commission (SEC), has raise raised hopes that the Central Bank of Nigeria, CBN, may soon open liquidity window for capital market operators for funds to boost the Nigeria’s capital market.

This optimism was expressed recently by the Director General SEC, Mounir Gwarzo in Lagos, as he revealed that discussions were ongoing between the commission and the CBN on the issue.

He said that though the apex bank’s regulator was hesitant to such funding window initially, but with sustained conversation, it is expected that grey areas would be sorted out in due course.

Gwarzo said, “At the last meeting we had with the CBN, they were very comfortable with the arrangement; and they have raised a few concern issues; and we are convinced that at the next stage, we will address those concerns.”

According to him, initially, the CBN did not understand the concept, adding: “but, we are happy that the CBN was able to have that conversation with us. What we are saying is for the CBN to be able to allow the capital market operators to leverage the discount window to get liquidity. All what we want from the CBN is, what kind of criteria do you want capital market operators to meet?”

He said that the commission was also interested in knowing the conditions that market operators would meet before accessing funds from the CBN. “And also, what type of securities do you want capital market operators to place as collateral? So, that they should have the opportunity to do that.”

According to the DG, SEC, it is only the capital market operators that are denied access to the CBN’s funding window, as all other value chains of the market are leveraging on that.

He said,“In fact, the entire value chain of the capital market has access to liquidity for a long period of time, but it is the capital market operators that don’t have that liquidity.
What they can do is to go to a bank and borrow money at a very high rate; and we say that if we needed liquidity in the capital market, the capital market also needs to have that opportunity.”

Bonny Amadi