The Securities and Exchange Commission (SEC) on Wednesday, stressed the need to exercise restraint in the proposed amendment of the Investment and Securities Commission Act 2007. The bill seeks to amend the commission’s Act to provide for greater transparency and accountability in the finances of SEC and to ensure effective legislative oversight.
The proposed amendment of sections 20, 21 and 23 of the Act, seeks to remove the commission’s powers to utilise the funds only through an Appropriation Act., Ms Aruma Oteh, Director-General of SEC gave the advice at a public hearing for an Act to amend the Investment and Securities Commission Act 2007. The hearing was organised by the House of Representatives’ Committee on Capital Market and other Institutions.
She said that the commission was established to regulate and develop the Nigerian Capital Market and was exempted from remitting its revenue into the Federation Account.
“It therefore, behoves that the fund created under section 19 of the ISA 2007 is established for that specific purpose and therefore, exempted from the requirements of section 80 (1) of the 1999 Constitution. Under Section 80 (1) of the 1999 Constitution, all revenues or other monies raised or received by the Federation not being revenues or other monies payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose shall be paid into and form one consolidated revenue fund of the federation.
She noted that regulation of the capital market would suffer where the core mandate of the commission was not carried out owing to non-availability of fund The commission is of the view that the proposed amendment if implemented will negatively affect its activities such as surveillance and enforcement.
“It is important for funds to be readily available for use by a regulator as a result of the dynamic and unpredictable nature of the market.
Requiring SEC to pay its surplus fund into the consolidated revenue fund will slow down and undermine its regulatory and developmental efforts because it will be bogged down by bureaucracy. It should be noted that where there is no effective regulation, investors” confidence in the market will be eroded as operators and other participants may violate rules governing the market,” she said.
According to her, the proposed amendment will adversely affect SEC’s operational activities as it will not be able to access funds urgently when needed. She said that the appropriate committees of the National Assembly had always overseen the capital markets and the commission. Oteh urged the National Assembly to sustain the existing practice on annual estimates of the commission’s expenditure being laid through its Committees on Capital Market.
She said that SEC was not funded statutorily from government, adding that the commission’s administrative functions were taken care of through penalties, fees and charges from operators. Rep. Umar Jibril (PDP-Kogi), the Chairman of the committee said that the committee’s objective was to implement the resolution of the House. “As part of the House, we have a responsibility to defend what the House is doing. It is up to you to tell us if the bill proposed bill is good. It will also give you the opportunity to tell us your challenges,” he said.