By PETER EGWUATU & FAVOUR NNABUGWU

The Director General, Securities and Exchange Commission, SEC, Ms. Arunma Oteh, who was a guest speaker at the recently concluded annual lecture of Women in Business in Lagos spoke on a lot of issues affecting the Nigerian capital market as well as issues affecting  women’s investment in the capital market.

Excerpts:

Few years ago people lost a lot of money in the capital market. How have you been able to stabilize the market?

I have been at this job for four years. First and foremost , please don’t go into something you are not familiar with, the financial literacy agenda is big. Second and more importantly is that as the apex regulator, we will not permit wrong doing in our markets; we will take the necessary steps to ensure that people who do the wrong things are brought to book.

Ms Oteh, SEC’s DG

There were a lot of things that were done wrong in the past and that is a signal, so those who are in this market today know that you cannot do the wrong thing. Third is going back to the financial literacy agenda. It is to really make sure that people understand that investing particularly in the stock market is not something you do with money that you need to feed  with tomorrow.

It is what you do with savings that you are going to use in the future and therefore there will always be volatility in the markets, you will not feel as hurt as if you understood that this money is not money that we need immediately. The other thing is just to make sure that the market is deeper, that there are many more companies listed, that there are other instruments other than equity, so the bond market is one of the things that we have supported.

Why are there issues regarding the new minimum capital requirement?

The SEC is very comprehensive when it does anything. Many of you may know that in 2007, I had not joined  the commission but I read some of what journalists  had written. The SEC had asked for capital requirement to be raised and that was foiled. When I joined in 2010, as fallout of the global financial crisis, the SEC staff felt that we need to raise the capital requirement primarily because there were accusations of people selling customer shares without authorization, people holding on to the proceeds of sale and all kinds of accusations.

So, my colleagues were like we need an immediate response. But because I was new, I wanted to study the issues; I also wanted the circumstance to be much easier for all of the market participants, whether brokers, fund managers or in whatever capacity an operator operates . So I took some time  to study the issue, after doing that, I then set up a committee that was chaired by our then Commissioner for Operations and had representations from the Chartered Institute of Stock Brokers, from the Owners of Association of Stock broking Houses of Nigeria (ASHON  from the Nigerian Stock Exchange ,NSE and others. And they came up with a proposal.

They completed their work at the end of 2012, we studied the work that they did, and we also had an international expert who was Deputy CEO of the Toronto Stock Exchange comment on that work. We reviewed it internally, and then made proposals on the basis of that work. Essentially, the issues are first we want our institutions in Nigeria to be as strong as institutions everywhere. As the market is evolving and we are building a world class, you are not going to be world class if you do not build institutions. You do not want people to come from outside Nigeria and take the benefits of what is happening in Nigeria because our own firms are not prepared.

The NSE is getting advisers for demutualization. What role is SEC playing in this?

On demutualization, we agree with you about the importance to Nigeria and that is why we started very early. If you remember in 2011, we set up an industry committee on demutualization chaired by Mr. Asue Ighodalo a well known corporate lawyer; they did an excellent work which they made a submission to us.