The Chairman House of Representatives Committee on Capital Markets and Institutions Hon. Babangida Ibrahim, has said that the provisions of the Investments and Securities Bill recently passed by the lower chamber of the National Assembly will inspire confidence of both local and foreign investors as they can be assured that the regulators have been sufficiently empowered to deal with malpractices that undermine confidence in the market.
Hon. Ibrahim made this remark during a media chat in Abuja
The lawmaker maintained that foreign investors and market participants would be attracted to the Nigerian market because they will have comfort in the fact that the Bill seeks to mirror standard investor-protective provisions and practices in advanced jurisdictions, which the foreign participants are already familiar with.
On the imperative of the new Bill, Ibrahim noted that the current enabling law for the Nigerian capital market, the Investments and Securities Act, No. 29 of 2007 (“ISA”) which was enacted in June 2007 cannot adequately respond to emerging issues in the global investment space.
He explained: “The Bill introduces stiffer sanctions in the form of increased fines and jail terms, which are commensurate with the severity of offences, and also serve as deterrence to potential future offenders.
“For instance, a jail term of not less than 10 years has been provided to address the menace of Ponzi schemes and illegal investment schemes that have caused heartache for thousands of Nigerians who have been victims of such scams. Other offences such as market manipulation, insider trading, false statements in prospectuses etc. are also subject to severe punishment.
“The Bill will ensure the diversification of the Nigerian economy away from a mono product oil economy through the strengthening of the Nigerian commodities ecosystem with the trading of warehouse receipts and commodities contracts on the Commodities Exchanges.
“The Bill also contains legal framework for registration and regulation of new types of critical market infrastructures such as central counterparties, which will be responsible for managing the risks emanating from transactions in derivatives and other financial instruments, thereby ensuring the safety and integrity of our markets and boosting investors’ confidence” the lawmaker added.
Speaking on the benefits of the Bill when enacted into law, the lawmaker projected that “the bill will generally revitalize the Nigerian capital market, as it introduces regulation of new businesses, products and services that will deepen the market while equipping the apex regulator with appropriate powers to protect the market and enforce the provisions of the Bill.
“In every sense of the word, this bill is truly a market inspired Bill. Inputs were received from all segments of the Nigerian capital market – the Securities Exchanges, Commodities Exchanges, the Central Counterparties, Capital Market Operators and Trade Associations, Chartered Institute of Stockbrokers, Capital Market Professionals such as the Legal Practitioners as well as Shareholders Associations”, Ibrahim maintained.
