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SEC Plans Revised 10-year Master Plan

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The Securities and Exchange Commission (SEC) has announced plans to launch a revised version of the 10-year Capital Market Masterplan in 2022 to reflect the dynamism of the market and developments in FinTech among others.

This is as stockbrokers expressed support for the introduction of regulatory charges on fixed income securities by the regulator.

Recall that SEC introduced regulatory fees on Fixed Income (Bonds) secondary market transactions executed on the Securities Exchange for onward transmission to a Depository for settlement, price discovery and corporate disclosure, effective January 1, 2022.

By this fee structure, the SEC will charge 0.025 per cent of the total value of all secondary market transactions on bonds, while the Securities Exchange on which the transaction occurs will charge an amount not exceeding 0.025 per cent of the total value of secondary market transactions on bonds.

Speaking on the revised masterplan, SEC director general, Mr Lamido Yuguda, in a statement that was issued by the commission yesterday, stated that as the year 2022 commences, the commission is confident that the results of the various initiatives implemented will begin to gradually manifest, spurring developments in many aspects of the market.

He expressed the hope that as the restrictions of Covid-19 and its variants are eased up, the market will witness renewed confidence expected to introduce fresh investments from domestic and foreign investors.

“As we expect improvements in both economic and capital market activities, we must remain committed to developing the market in line with the 10-year masterplan. Some of the key initiatives to be pursued in 2022 are as follows: The repeal of the Investment and Securities Act (ISA) 2007 and passing of the Investment and Securities Bill 2021 to align the enabling law with the realities and trends in capital market regulation and practice in Nigeria;

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“In conjunction with the NASD Platform, provide the necessary incentives and support to attract SMEs to get listed. Already, Rules on Crowdfunding to encourage new funding sources for the SMEs have been developed;

“The SEC will continue the enhancement of the existing regulatory framework guiding the operations of the market by keeping pace with the evolving changes in market practices, especially with the advent of Financial Technology and digital assets,” he stated.

Meanwhile, by the newly introduced SEC charges on fixed income securities, bond transactions by dealing members will attract a single regulatory fee of 0.0001 per cent of the total value of the secondary market transactions on bonds, and are exempt from the 0.025 per cent fee charge earlier stated.

The president, Chartered Institute of Stockbrokers (CIS), Mr Olatunde Amolegbe said, the apex capital market regulator has brought significant regulation to all markets, including the fixed income markets with a view to bringing more sanity to those markets.

According to Amolegbe, there is no issue with the introduction of a regulatory charge on transactions.

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However, whether it should be as high as 0.02 per cent is open to discussion. “We cannot ignore the fact that such will definitely increase the net yield on instruments, reduce spreads and might impact trade volumes. I am sure the market ecosystem will ultimately arrive at a point of equilibrium for all participants.”

Also, chairman of Association of Securities Dealing Houses of Nigeria (ASHON), Mr Sam Onukwue said, SEC was in order to introduce regulatory charge on fixed income securities, saying, “I do not think it is out of place for SEC to do so. The Commission has been charging on equities all along.

“The proposed charges on fixed income securities should not discourage investors from the asset class. Investors have their preferences and would always weigh their risk tolerance and other fundamentals in making investment decisions. We have risk takers and risk averters. The former invests more in equity while the latter have strong hold in fixed income securities.”

 

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