SEC adopts new measure to boost liquidity in capital market

Mounir Gwarzo, Director General Securities and Exchange Commission

Says no extension of deadline on e-dividend enrolment
The Securities and Exchange Commission (SEC) has inaugurated a committee that would commence a study on how to address liquidity issues in the capital market.

Already, the committee has agreed to submit the outcome of the report in the next four weeks, after which a team would be set up to kick-start the implementation process.

Addressing reporters at the end of the third quarter Capital Market Committee (CMC) meeting held in Lagos yesterday, the Director–General of the SEC, Mournir Gwarzo, explained that the issue of illiquidity has become a major challenge impeding the growth of the market.

He explained that the securities lending and other initiatives introduced initially in the market to improve liquidity does not yield reasonable results because market operators could not access the liquidity needed to execute the deals.

“We received a report from the committee looking at the liquidity system in the market. One of the things challenging this market is the issue of liquidity. Some of the initiatives we came up with like the securities lending, and some other initiatives are because those operators do not have access to liquidity and that is why it has not been very effective.

“This committee will look at the entire spectrum of liquidity in the market, they have agreed that in the next four weeks they will submit the report and we will come up with implementation team.”

Speaking on the state of some other initiatives adopted to drive market development, the SEC boss bemoaned the low enrolment level of the e-dividend exercise, urging all stakeholders to support the initiative.

He dismissed suggestions to extend the December 31, 2017 deadline for the free underwriting of e-dividend registration, maintaining that investors that failed to register on or before the stipulated period would have to pay the sum of N150 enrolment fee.

“In the last two to three months, there has not been appreciable growth in e dividend in terms of enrollment. SEC has been very magnanimous in its engagements and I do not think we want to keep suspending it.

“By December 31, 2017, any investor that do not register will pay for enrolment, no more extension, any investor that is not ready to register from now to the next two months must be ready to pay.”

Furthermore, Gwarzo explained that the commission has made substantial progress in the areas of inculcating capital market studies in both secondary schools and tertiary’s curriculum, adding that the first phase of the studies would be effective by April 2018.

“We have made presentation to CMC, they have adopted and approved the budget, we have given a deadline of end of this month for all the stakeholders to pay in their contributions and we expect by April next year, we should be able to get the first phase of the capital market studies.

“We intend to work closely with Nigerian Education Resource Development Centre so that that they can inculcate the studies of capital market both in the secondary schools and tertiary institutions. “



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