The House of Representatives Committee on Capital Market and Institutions, the Securities and Exchange Commission SEC, the Chartered Institute of Stockbrokers of Nigeria and other critical stakeholders in the capital market sub-sector of the nation’s economy have thrown their weight behind the repeal of the Investments and Securities Act 2007 by the National Assembly and re-enactment of a new ISA 2022.
The House, Commission and other key sector stakeholders called for a complete overhaul of the ISA through a new piece of legislation- the Investments and Securities Bill 2022 in order to achieve the objective of consolidations the efficiency, transparency and viability of the market.
Director-General of SEC Lamido A.Yuguda, President of Chartered Institute of Stockbrokers of Nigeria Oluwole Adeosun and others key industry players spoke at the opening of 2-day public hearing organized by the House or Representatives Committee on Capital Markets and Institutions.
Speaking on the need for strong regulation, Speaker of the House Hon.Femi Gbajabiamila said that the thee need for operators in the capital market ensure fairness and transparency in their activities as to spur investors confidence is a concern.
He noted that the need for the nation’s capital market to be able to provide the needed funds and capital for businesses to expand and innovate and thrive in the competitive global political economy is imperative.
Similarly, Chairman of the House Committee Hon. Babangida Ibrahim said that the Investment and Securities Act (ISA) 2007 seeks to repeal the existing law to establish a new market infrastructure and wide ranging system of regulation of investment and security business in Nigeria
The proposed law introduces according to the industry regulator express prohibition of ponzi/pyramid schemes as well as other illegal investment schemes. It also prescribes a jail term of not less than ten years for promoters of such schemes in Nigeria.
According to the stakeholders, given the evolution of the Nigerian capital market since the passage of the ISA 2007, it was the consensus of these sector players that a complete new legislation is necessary in order to strengthen regulation of the industry.
The DG in a presentation to the House Committee had called for the inclusion of the National Pensions Commission on the Board of the industry regulator and its membership to encourage greater investment of pensionfunds and in capital market products/instruments.
He also called for effective monitoring, management and mitigation of systemic risks in the nation’s capital market
Moreover in a presentation at the hearing, the President Chartered Institute of Stockbrokers of Nigeria Mr Oluwole Adeosun said that the new law should prescribe a ten year jail term for promoters of ponzi schemes.
A vital provision in the new law is that the SEC sets up Investors Protection Fund to ensure compensation of investors who suffer pecuniary losses arising from the revocation or cancellation of the registration of a dealing member firm.
The bills are ‘A bill for an Act to Repeal the Investments and Securities Bill to Establish Securities and Exchange Commission as the Apex Regulatory Authority for the Nigerian Capital Market as Regulator of the Market to Ensure Capital Formation, Protection of Investors, Maintenanance of Fair, Efficient and Transparent Market and Reduction of Systemic Risks and For Related Matters’
Also considered is ‘A Bill for an Act to Repeal the Chatered Institute of Stockbrokers Act Cap LFN 2004:and Provide For the Establishment of the Chattered Institute of Securities and Investments and For Related Matters’.