‘SEC Working On Crowdfunding Regulation ‘
The Acting Director General of the Securities and Exchange Commission (SEC), Ms. Mary Uduk, at the weekend hinted of arrangements being made by the commission to design a framework that would regulate the use of crowdfunding by small businesses to raise capital in the Nigerian Stock Exchange.
Uduk, who gave this hint while interacting with journalists on the sidelines of the just concluded annual meetings of the World Bank and International Monetary Fund (IMF) in Washington DC, said that the move aimed at protecting small investors in the capital market.
She clarified: “Investors’ confidence is central to our job as the regulator of the capital market. People must have the confidence to invest.
“With crowdfunding, private companies like SMEs can raise money raise long-term funds using regulated platforms. The platform of the crowdfunding will be regulated by the SEC”, Uduk added.
On the performance of the nation’s bourse in the current fiscal year, the Director General said that the market had recorded a significant boost with the listing of MTN Nigeria and Airtel on the exchange.
Specifically, Uduk explained that the the primary market had witnessed a new trend in the last one year with the listing of the telecom companies, adding that dual listing of Airtel signifies the interest of the foreign issuers in the Nigerian capital market.
She expatiated: “Consequent to the Airtel IPO, some offshore companies are in discussion with the commission for an IPO that will be dually listed in Nigeria and the UK. If you look at the equities market, especially on the NSE, the market has lost about 16% so far this year, on the back of relatively weak economic fundamentals and investors sentiments.
“However, as we are into the last quarter of the year, we hope to also see some improvement in the equities segment, especially as investors see opportunities to pick low-priced stocks. As you know, even in a down market, there are still opportunities, since what is down has a higher probability of rising”, she added.
Encouraged by the listing of the telcos on the nation’s bourse, Uduk said it would be a great thing for more companies in the oil and gas sector to get their shares listed on the bourse.
Uduk said: “As you rightly said, the listing of MTN and Airtel was a very positive outcome and they substantial raised the capitalization of the equities market. It also meant we now have the telecoms sector of the economy represented on the stock market.
“Therefore, it will be great to also have the petroleum sector well represented on our market and having NNPC will make it greater. Recall that one of the provisions of the Petroleum Industry Governance Bill (PIGB), if approved, is to list 10% and an additional 30% of NNPC companies between five and 10 years.
“If this is done, it will significantly improve the size and performance of our market. Meanwhile, it will also be important for the NNPC companies to be well commercialized such that they can return positive profits to their shareholders.
“I believe that with the country’s potential in the oil and gas sector as well as with appropriate governance and commercialization policy, investors, the market and the entire economy will benefit from such listing and it will be a great achievement indeed”, the investment expert stressed.
She assured that the commission would continue to seek new ways to expand the market and release instruments that would make investments easier.