The Securities and Exchange Commission has rolled out a roadmap that will ensure the strength of the regulatory framework guiding borrowings by both government entities and corporate organizations.
Speaking during an interview, the SEC Director General, Dr. Emomotimi Agama, shed light on the strategic importance of the initiative against the background of the reality that borrowing is inherent in the financial ecosystem. “Improving the framework for borrowing is very important because borrowing is part of the financial system and we can only make much of the move we want to make if there is enough funding,” he said.
The blueprint assumes great import in the light of some recent judicial pronouncements. “Hence, we want to be sure of sustainability in both government borrowing, municipal and state governments particularly with the new Supreme Court order regarding the 774 local government areas receiving direct subvention from the Federal Government,” Agama said. He emphasized the need for good governance of resources through good borrowing practices as a way of engendering development in many aspects.
Addressing corporate borrowing, the SEC is effecting transformational changes with the introduction of new rules on CCPs. “As a Commission we have established those new rules and they are going to be functional in 2025. We want to make borrowing a seamless and effortless process for Nigerian companies,” Agama said.
The Commission’s vision does not stop at conventional market offerings. “It is very important that as we drive the growth of the Nigerian capital market, we also drive new products and new opportunities for every Nigerian. Nigeria for a long time has been seen as a mono product market, but the Year 2025 will be different because we will continue to drive the process of introducing derivatives into the capital market,” the Director General said.
To assist these improvements, the SEC is building strong legal frameworks. According to Agama,”Without the law and rules, it is not possible to do this in a better way. We want to give a clear exemption of these transactions from the general insolvency law, to build confidence in the trading of derivatives,” Agama elaborated.The commission has several objectives, including creating a more secure trading environment to boost investor confidence and attract new market players. This means that strong laws and regulations are developed to ensure investors’ protection.
Experts of the industry feel that such improved borrowing framework can lead to increase in the liquidity in the market and growth of the economy.
The changes that have been proposed will create new and varied investment opportunities while ensuring stability and integrity in the market.
