BY MICHAEL EBOH

The Securities and Exchange Commission, SEC, has declared zero tolerance for infractions and unethical practices in the Nigerian capital market, vowing to deal with any individual or firm found to be engaged in acts capable of undermining the integrity of the market.

Director-General, SEC, Ms. Arunma Oteh,  who disclosed this at the House of Representatives Special Committee on Capital Market and other institutions’ public hearing, also disclosed that the commission was strengthening its partnership with law enforcement agencies.

She said SEC was stepping up its partnership with the Federal Ministry of Justice, Economic and Financial Crimes Commission, EFCC, and the Nigeria Police Force, adding that it has stepped up its investigative and enforcement activities with the setting up of resident legal teams from the Federal Ministry of Justice and a police desk in the commission.

She further disclosed that the commission had since 2010 churned out 70 new rules and undertaken the amendment of a number of the rules as parts of efforts aimed at strengthening the capital market.

Oteh said as part of its regulatory oversight and enforcement, SEC sanctioned a number of capital market operators and issuers due to inadequate filing of periodic returns and other market infractions.

According to her, SEC took various enforcement actions against operators and some publicly-quoted companies, disclosing that between 2010 and 2011, 52 firms were suspended for various violations, while 30 were referred to law enforcement agencies for further actions.

She said, “This excluded the 260 entities and individuals whose cases were taken to the Investment and Securities Tribunal for various violations.”

Oteh expressed optimism that Nigeria has the capacity to build a world class capital market that can serve as a catalyst for realization of the country’s full potential.

According to Oteh, the Nigeria’s capital market has the attributes of a world class capital markets and the potentials to engender high investor confidence, market integrity, efficient processes, adequate product offerings, sound regulatory framework, strong and transparent disclosure and accountability regime as well as good corporate governance.

She declared that the capital market can play an essential role in economic development, pointing out that the sector is the principal platform through which low cost funds to finance medium to long term projects are mobilised.

“The capital market can foster diversification of the country’s economic base which is largely oil dependent and thereby assist economic agents to pool, price and exchange risk and ultimately creating wealth,” she noted.

In her assessment of the market, Oteh explained that notwithstanding the crisis brought about by the global financial crisis, the nation’s capital market outperformed a number of other global markets.

She said, “Nigeria’s decline of 16 per cent in market capitalization should be viewed in the context of a 22.8 per cent stock market decline in China (SSEA), 16.3 per cent in Brazil, 22.6 per cent in India, 48.9 per cent in Egypt, 26 per cent in Italy, 30.3 per cent in Argentina, 18.4 per cent in France.”