SEC plans further stratification of stock market

The Securities and Exchange Commission, SEC, has said that plans are under-way to further stratify the stock market to allow more Small and Medium scale Enterprises, SMEs, that were hitherto not listed on the Nigerian Stock Exchange, NSE, to access the market.

Speaking recently in an interactive session with capital market correspondents in Lagos, the Director General, SEC, Mr. Mounir Gwarzo, said that the process when completed would lessen the strident listing rules that have been hindering such companies from listing in the stock market.

He stated that the move would allow more SMEs to list in any of the exchanges that would be set up other the Nigerian Stock Exchange. He said: “As at today, our law provides the registration of Exchange’s trading platform, cashless trade points and what we have at the Nigeria Stock Exchange are three boards.

“We think it will probably drive some of these SMEs to be listed because over the last 20 -25 years, we have not seen much progress with the existing status. There are few companies that want to come in and set up small trading platforms and we think we have to give the necessary backing to do that”.

On delay in take-off of crowd funding, he said that there are some restrictions in the Companies and Allied Matters Act, CAMA, and the Investment and Securities Act, ISA, that have been impediment for the Commission to drive crowd funding. He, however, said that with the review of CAMA and ISA, which is on-gong, those limitations are addressed.

He further stated that the on-going review of CAMA and ISA would also provide an easy route for any company that wants to demutualize to do so. His words: “We have engagement with the NSE in terms of briefing us on how far they have gone; they appointed some consultants to drive the process.

“Hopefully by the time the law is out, it will be much easier for SEC to come out with rules on crowd funding,” he said. Fielding questions on the cause of delay in demutualisation of the Exchange, saying that its role as the apex regulator of the Nigerian capital market to come up with guidelines, rules and regulations to drive the process. He explained that the Commission has come up with rules and regulations and is committed to ensuring that any institution that intends to demutualise does that successfully.