SEC activities shrouded in secrecy- Reps

By Tordue Salem
ABUJA—The House of Representatives and Securities and Exchange Commission, SEC, yesterday, disagreed over claims by the legislators that the operations of the regulator were shrouded in secrecy.

Director General of SEC, Ms. Arunma Oteh, described the proposed Bill to restructure the commission “for more accountability and transparency” as antithetical to the present efforts of SEC to achieve a world class capital market.

She also warned that the amendments to the Investments and Securities Act will scare away investors.

The House Committee on Capital Market and Capital Market regulator, clashed at a public hearing on the Bill for an Act to amend the Investments and Securities Act.

The House Committee on Capital Market had expressed dissatisfaction with the management of funds that have so far accrued to SEC.

The Committee Chairman, Umar Buba Jibril, told stakeholders in the stock market that between 2006 and 2009, SEC generated and spent N32 billion in contravention of the 1999 Constitution which stipulated that all monies generated by any organ of government be paid into the Federation Account for subsequent appropriation.

According to the committee, SEC in 2006 generated and spent N16 billion, N13 billion in 2007, N8 billion in 2008 and N3 billion in 2009.

The panel said that it was more worried about the fact that all the expenditure of SEC was on overhead.

The committee said.

“We need to restructure SEC in such a manner that will guarantee transparency, accountability and probity in its expenditure. There must be checks and balances. As it is now, SEC regulates the Capital Market but nobody regulates it. Leaving it as it is at the moment is not good because we need to check against abuses”

The panel said that “As part of measures to reform the SEC, some amendments have been introduced in the Investments and Securities Act bring it in conformity with the constitution and standard financial procedure.”

Some of the amendments include the clause in section 20(2) of the Bill which stated that: “No money shall be withdrawn from the Fund of the commission unless the issue of those monies has been authorized by an Act of the National Assembly”

The Bill has also modified the power of the Board of the commission regarding approvals for SEC’s expenditure by stating that “Disbursement from the reserve shall be approved by the Board of the Commission subject to the provision of section 20(2) of this Act”

Another reformist amendment in the Bill is that ”all heads of expenditure contained in SEC’s annual income and expenditure estimates shall be included in  Bill providing for the issue from  the fund of the commission of the sum necessary to meet that expenditure and the authorization of those for the purpose specified therein”
SEC however insisted that some of the reforms contained in the Bill are “counterproductive”.

Director-General of SEC, Ms Aruma Oteh, at the public hearing,  said: “We however submit that the proposed amendments will undermine the efforts of the commission to build a world class capital market that will enable Nigeria address its huge funding requirements as it seeks to meet the social and economic aspirations of its citizens”.

She added that, “This is because the proposed amendment is not in line with global best practice and if enacted will undermine investor confidence”.