By Michael Eboh
The Securities and Exchange Commission has faulted the trading platform of the Nigerian Stock Exchange (NSE), declaring that it is incapable of meeting current challenges of a dynamic and growing capitalÂ market.
Speaking at the Nigerian Economic Summit Groupâ€™s Policy Dialogue on the Nigerian capital market, Director-General of SEC, Ms. Arunma Oteh also stated that SEC will not hesitate to mete out sanctions to the NSE if it is incapable of instilling discipline in the capital market.
She expressed concerns over the absence of the necessary platforms that will drive the capital market and position it for growing challenges and sophistication.
She said, â€œSecurities exchanges are extremely important to the development of capital markets. They are private institutions whose functions are important to capital formation, wealth creation and economic development.
â€œIt is therefore, not surprising that governments and the public usually develop considerable interest in their activities and stability.
â€œWhile they are well recognised as wealth creating institutions, poor governance of exchanges can undermine integrity and destroy wealth. A poorly governed exchange is a good â€˜candidateâ€™ for abusive practices.
â€œObviously, to build a world class market, the governance of the exchanges in the country has to be over-hauled and trading infrastructure upgraded to meet the challenges of an increasingly dynamic, sophisticated and growing market.
â€œThe current platforms are incapable of meeting these challenges as recent happenings have shown.
She noted, however, that it is currently holding talks with the management of the NSE, where it has been assured that by the NSE that efforts are being made acquire a more efficient trading platforms.
According to Oteh, SEC is interested in this, giving its importance to market integrity and development and will make relevant input and monitor developments.
Oteh also called for a review of the laws, processes and activities of the NSE to ensure strict compliance and enforcement of market rules and also ensure elimination of actions capable of bringing the integrity of the market into question.
â€œThe governance of the exchange,â€ according to Oteh, â€œShould be such that prevents the occurrence of conflict of interest, enshrines accountability, transparency and professionalism and commands public trust.â€
â€œAn exchange must be seen to enforce its own rules and where it fails to do so, be sanctioned by the statutory regulator. This is the best practice which SEC has committed to enforce,â€ she added.