By Babajide Komolafe
The Federal Government should not experiment with the appointment of a new Director-General of the Securities and Exchange Commission (SEC) by appointing a learner, says a senior capital market operator.
This was disclosed by the Managing Director/Chief Executive, Partnership Investment Company, Mr Victor Ogiemwonyin, in an article titled, The capital market and the new leadership the market demands.
He said, â€œThe new D.G must be fair, but firm in his or her decisions. He or she must be somebody who understands the market; we donâ€™t have time for experiments and learners.â€
Since the sudden departure of the former D-G, Mr. Musa Al-Faki, in April, the appointment of the next SEC D-G has become a topical issue among operators in the nationâ€™s capital market.
The departure of Al-Faki was prompted by the sharp downturn in the nationâ€™s stock exchange, where market capitalisation fell by 65 per cent last year.
Some market operators believe the stock market crash was due to the weak regulation by the Al-Faki led Commission and his deference to the leadership of the Nigeria Stock Exchange where he was a council member before his appointment.
â€œMr. Al-Faki was a product of the market, and coming from the stockbroking community, he was, sometimes, caught between being firm as a regulator and doing favours for his friendsâ€, Ogiemwonyin remarked.
He said â€œThe capital market is generally known as the creative area of finance. It continually innovates and offers sophisticated instruments which the regulator must be abreast of, if it is to be registered as a security offerable to the investing public. The bottom line is that the business is a knowledge business and only those with the requisite technical knowledge should be appointed the new D.G of SEC.
â€œThe recent meltdown in the market here and abroad, has brought to fore the importance of capital markets to all aspects of our lives. We now know that whether you are an investor or not, the activities in the market impacts on everyone.
â€œThe capital market fund raising function, which allows government and large companies to raise money that is used in development and creating employment which create taxes, is clearly one function that can not easily be toyed with.
â€œThe last banking and insurance industry consolidation would never have been possible if we did not have a functioning capital market.
â€œThe capacity to also create wealth has never been in doubt. The rapidity, with which it can create and spread wealth became obvious in the last 2 years. Nigeria witnessed rapid development of its middle class, a class that has almost disappeared in the last 2 decades.
â€œIt is for these important reasons that the next appointment will be crucial. The market expects the new D.G to be a serious person with a world view and clear understanding if its role and the importance of regulating the market.â€