As part of measures to ensure standards for commodities trading in Nigeria,
the Securities and Exchange Commission (SEC) has inaugurated a committee on agro-based standards.
Speaking at the second post-Capital Market Committee (CMC) virtual news conference on Friday, the Director-General of SEC, Mr Lamido Yuguda, explained that the commission had constituted a technical committee to deliver agro-based standards for the country within three months.
He listed the members of the technical committee as representatives of the commission, Standards Organisations of Nigeria (SON), AFEX, Lagos Commodities and Futures Exchange (LCFE), and the Nigerian Commodities Exchange (NCX).
According to him, the agro-based standards is part of the commission’s efforts in encouraging investment in commodities space.
“This is to encourage investments in this massive area where Nigeria has a dramatic comparative advantage compared with many other countries.
“For agro-based commodities to be traded, you will need the standards and these standards will be developed by different agencies but principally the SON.
“We have engaged with these organisations, a committee has been set up and they are working hard to ensure we have these standards within the next three months,” Yuguda said.
He added that as part of measures to deepen the commodities ecosystem, the commission held engagements with the National Insurance Commission toward de-risking and insuring certain commodity assets.
This, he said, would attract more investments within the space, particularly from the pensions industry.
He added that the commission equally solicited the support of the National Bureau of Statistics to develop an effective price discovery mechanism for the commodities ecosystem.
“A technical committee has been constituted for this purpose with the mandate of developing modalities for this exercise.
“The commission acknowledges the critical role the capital market can play in long-term financing of infrastructure in the country.
“We will continue to work with relevant stakeholders to unlock the use of capital market instruments in funding key infrastructure needs, especially in roads, housing and clean energy.”
Meanwile, the commission has to clamp down on illegal capital market operators, especially operators of Ponzi Schemes.
Yuguda said the commission would remain committed to zero tolerance for market infractions.
He said the commission would continue with the campaign against illegal operators in the capital market, especially Ponzi Schemes.
“SEC has adopted multi-level engagements with media platforms and regulators of publicity agencies in order to curb the reach and activities of these illegal operators.
“While we continue our activities to resolve the complaints that have been forwarded to the commission through the official channels,” he said.
He added that it was important to reiterate to the investing public to be wary of unscrupulous schemes that promised unrealistic returns on investment.
“We will like to use this opportunity to reiterate our commitment towards zero tolerance for market infractions.
“We urge every capital market operator to operate within the market functions approved for it by the commission.
“The commission will not hesitate to deal decisively with any operator who carries out any activity outside the function(s) approved for it by the commission,” he said.
Yuguda said, “no capital market can grow without discipline and adherence to laid down rules and regulations.”
He noted that Ponzi Schemes were a big problem for the economy and the country in general.
“Every month, everyday, many of our citizens lost huge monies to Ponzi Scheme operators and the commission has adopted a variety of measures,” he said.
According to him, the measures include putting up the list of the authorised operators on SEC’s website so that interested investors will to confirm that the scheme they intend to invest in is through a registered operator.
“But unfortunately, many of these ponzi scheme operators, once they give mouth watery promises and entice many gullible investors, in the end monies are lost and these investors start flocking to our offices to complain.
“We have engaged a number of regulators and a number of media platforms to ensure that the message is actually delivered to the public that any promised return that looks so generous should actually be suspicious.
“It is a continuous fight, we are not resting on our oars in this. These Ponzi Schemes are truly a cancer in our society and every hand must be on deck to fight this cancer,” Yuguda said.
Speaking on the outcome of the CMC, he said the commission had registered two Fintech capital market operators, which included a Digital Fund Portfolio Manager and a Digital Sub-broker.
He added that the commission was looking forward to registering more Fintech players in the market.
Yuguda noted that the commission had approved some derivative contracts, developed the regulatory framework for derivatives trading as well as rules on Interoperability of Central Securities Depositories in Nigeria.
