AS part of measures to deepen Nigerian capital market, the Securities and Exchange Commission (SEC) has expressed its determination to raise the participation of retail investors.
Speaking during a visit to the Federal Radio Corporation of Nigeria (FRCN) in Abuja on advocacy visit, Director General of SEC, Mounir Gwarzo explained that the dominance of the market by foreign investors is one of the reasons the market is not deep enough.
Gwarzo said: “Our intention is to ensure that we raise the level of participation of retail investors in the Market that is the only way we can maintain the strength of the market. Dominance of the market by foreign investor is one of the reasons why our market is the way it is. Although it is the pattern of the market, but this dominance is a major factor because they are the ones that come in and come out. We need to upscale the participation of the retail investors in the market and that is why we are addressing some of their concerns.
The DG explained that the Commission has embarked on various initiatives like recapitalisation, e-dividend registration, the Direct Cash Settlement among others.
He said: “We are urging Nigerians to go and register to get their dividends electronically. Once we get through with the e-dividend thing, we will be able to deal with other issues in the market. The entire market has commenced Direct Cash Settlement. The era when shares will be sold and the proceeds will be given to the broker who will them pay the client is over. What is obtainable now is that once the shares of an individual are sold, the proceed is paid directly into his band account. With this once the client has authorized the broker and provided all his details, the proceeds will be paid into the client’s account”.
Explaining further, he said every year the commission comes up with various initiatives from the Master Plan and have been implementing them, noting that “all the initiatives we came up with last year we have implemented them. This year we also came up with certain initiatives and one of them is the need for all arms of government to buy into the Capital Market Master Plan. It is only in Nigeria that we have not been given the kind of attention that the capital market deserves. The capital market is the one that defines the state of the economy.
Gwarzo said: “For instance there is a provision in CAMA that states that once dividend is declared, after 12 years if it is not claimed it become statue barred meaning an investor cannot claim his dividend. We don’t think that is right, the international best practice is that dividend must be in perpetuity.
“Once you can supply evidence that it is yours, that person should be able to claim it. The lacuna is a provision of the law and we are partnering with the parliament to see that such laws are amended and we had an excellent collaboration with them”.
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