THE Securities and Exchange Commission (SEC) has disclosed its plan to engage Asset Management Corporation of Nigeria (AMCON), Central Bank of Nigeria (CBN) and Financial Market Dealers Association (FMDA) on how to stimulate market-making on AMCON bonds.

Director-General, Securities and Exchange Commission (SEC), Ms. Arunma Oteh, who disclosed this during the fourth quarter of the Capital Market Committees (CMC) meeting in Lagos last weekend, said some of the committees’ plan for 2013 will include engaging the AMCON, CBN and FMDA to stimulate market-making on AMCON bonds both in the interbank market and trading on exchanges.

“We also intend to boost securities lending on bonds as we liaise with the National  Pension Commission (Pencom) and the relevant trading exchanges to set up a robust and efficient operating framework for securities lending. Also in 2013, we hope to have a robust trading platform on the Nigerian Stock Exchange (NSE); Active participation of the NSE and National Association of Securities Dealers (NASD) in licensing of market makers and commencement of market-making in fixed income securities.”

Other action plan that the commission hope to achieve in 2013, according to Oteh include:  Development of the Mortgage Backed Securities and Asset Backed Securities market: Amend the NSE listing guidelines by removing the requirement for SEC notification of approval of the basis of allotment on public offers which are either sold by book – building or firmly underwritten.

Speaking further, the SEC boss narrated some of the achievement of the CMC since last year to include:  Amendment of Personal Income Tax Act (PITA) which was gazetted with a commencement date of 14 July 2011.

According to her, “The CMC facilitated also the Companies Income Tax Exemption Order and a Value Added Tax (Modification) Order which were issued by the President and the Hon. Minister of Finance in 2012. The collaboration led by the NSE, DMO and NASD will work to realize the introduction of market making for debt securities particularly the illiquid Corporate and sub-national securities.”

Oteh also disclosed that there will be an ongoing review of draft securitization rules by the commission and commended the NSE for  its role in implementing market making for equities and introduction of securities lending.

Continuing, she said, “The NSE has made recommendations for the privatization of the Power Holding Company of Nigeria (PHCN) and listing of the offshoot companies. There is also work in progress to amend the rules of feeder funds and Funds of Funds; New Conduct of Business rules are in the offing. The market is making amendments to the regulation regarding infrastructure Funds.

Also, there is ongoing effort to benchmark Pension Fund Administrator (PFA) performance against respective asset classes. The market is reviewing the requirement for PFA’s to divest from securities downgraded (to be more specific); The market is considering a review of the requirement restricting investment in the securities of one company to a maximum of 20 per cent to make it applicable to policy holders only.”


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