FOR the Nigerian economy to achieve its full potentials, there is the urgent need for the capital market to be strong, sustainable, well functioning and play a central role in development activities.
The new Director-General of the Securities and Exchange Commission (SEC), Ms Arunma Oteh said this at the weekend in Lagos, that efforts must be intensified by stakeholders with the aim of building a solid foundation and restore investor confidence by eliminating the sharp practices that have characterised in the last two years.
According to her, sharp practices in the market led to the erosion of investors' confidence, adding that the development is responsible for the reform agenda, which SEC is leading.
"To restore investors' confidence, we must tackle the recent challenges that investors faced resolutely and painstakingly lay a solid foundation so that what happened in the last two years never happens again" said Oteh, adding that it will, however, take some time and patience.
She said from being one of the fastest growing among the world's developing and emerging economies, the Nigerian capital market had become one of the worst performing, having declined by 70 per cent from its peak in March 2008.
Oteh said when measured against comparable markets, the Nigerian capital market still consistently fell short of the benchmark in several key market performance indicators, such as market depth/ breath, market liquidity, sector concentration and transaction costs.
To reverse the trend, Oteh, who assumed duties on January 7, 2010 said, "the immediate priority of the reform agenda is to restore investors' confidence. Well functioning capital markets can not exist or flourish without investors. This is because capital markets thrive on investor interest in the investment opportunities that the market has to offer.
"We will achieve this by significantly enhancing our dual role of effective regulatory oversight and capital market development. These two roles reinforce each other as adequate regulatory oversight fosters a well-functioning capital market," said Oteh.
She also pledged to join hands with other stakeholders with the aim of fulfilling the commission's mission statement of developing a capital market that is fair, transparent, efficient and that is comparatively the best in the Africa continent and the world.
According to Oteh, road map for rebuilding the Nigerian capital market is anchored around five main agenda which include increased depth, disclosures, transparency and accountability, restoration of confidence in the market and building institutional capacity.
Oteh, who spoke on sundry issues related to the capital market at an interactive session with capital market correspondents said, " I am, therefore, determined to eliminate sharp practices, deter malpractice and change behaviours by ensuring that both the institutional and personal costs of any wrongdoing is extremely high. We will ensure high standards in regulatory oversight and enforcement and will name and shame where necessary.
"We are continuing to strengthen inspection and investigation and any operator found erring will be suspended, issued a warning, or fined depending on the gravity and nature of the violation.
"We hope that the various enforcement actions against erring operators, including their suspension from participating in capital market activities will deter other operators, including their suspension from participating in capital activities will deter other operators from breaching the rules.
"We will also continue to strengthen all the processes related to investigation, enforcement, prosecution and publicity of outcomes in line with international standards and ensuring that messages are well communicated to the market," said Oteh.
Source:© Copyright Guardian Online
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