The Securities and Exchange Commission (SEC) Nigeria has cautioned fund managers still in the habit of holding on to client’s funds and securities to desist from such unprofessional or unethical practice or face appropriate sanctions.
The commission’s Director-General, Mr. Lamido Yuguda, gave this warning while briefing journalists at the weekend on the key decisions taken by the Capital Market Committee (CMC) at the end of its meeting in Lagos.
He noted that holding on to clients’ funds and securities was a clear violation of the commission’s Consolidated Rule 95 (1-2) and reminded the fund managers that all funds and securities of clients being managed by their firms must be vested with the custodians.
Yuguda also drew the attention of the operators to issues that arose from the commission’s recently concluded inspection of Fund/Portfolio Management operations whereby several fund managers managing discretionary and non-discretionary products and portfolios were yet to seek a ‘No Objection’ of their products and portfolios from the commission, which is a violation of the commission’s rules.
The capital market regulator disclosed that the meeting also harped on the increasing importance of Fintech, sustainable finance, financial inclusion and non-interest finance to the capital market, adding that the Executive Management team of the SEC reiterated its commitment to continue in creating awareness, imparting knowledge and engendering public participation in the topical areas.
He clarified: “The market community was reminded of the annual renewal of registration of Capital Market Operators which is aimed at ensuring that only fit and proper persons operate in the Nigerian Capital Market. The portal for renewal of registration for year 2023 will open on 1st January, 2023 and close on 31st January, 2023.
“Members received updates from the Commodities Ecosystem Implementation Committee, that significant efforts were being made on transitioning the commodities market from spot-based operations to trading in commodity derivatives;
“Furthermore, the Commodities Ecosystem Implementation Committee informed members that it held engagements with Federal ministry of Agriculture and Rural Development (FMARD), Standards Organization of Nigeria (SON), Nigeria Export Promotion Council (NEPC), on the issue of traceability of commodities, which is considered a key building block for Nigerian export promotion”, the Director-General added.
Yuguda further hinted that the e-Dividend Committee notified members of efforts to rebuild the E-Dividend Management Mandate System (e-DMMS) platform, which involves having a centralized submission of E-dividend mandate forms, Application Programming Interface (API) for Banks and Registrars, and a revamped web interface among others.
He expressed his joy over the recent intervention of the House of Representatives Committee on Capital Markets and Institutions on unclaimed dividends, adding that the Committee is investigating the rising value of unclaimed dividend and unremitted withholding tax on dividends and that the commission is ready to provide all the necessary support to the committee to enable it carry out its oversight functions in the investment market.
The Director-General expatiated: “Members of the CMC were reminded to collectively work towards the enactment of the Investments and Securities Bill 2022, which will enhance the performance of the Nigerian Capital Market and align it with global best practices. The Bill seeks to improve the legal and regulatory framework that will accommodate the dynamics of the market.
“The meeting emphasized the increasing importance of Fintech, Sustainable Finance, Financial Inclusion and Non-Interest Finance. The Executive Management team of the SEC reiterated its commitment to continue creating awareness, imparting knowledge and engendering public participation in these topical areas.
“The Financial Literacy Technical Committee informed members that it made substantial progress on introducing Capital Market Studies (CMS) to secondary and tertiary institutions. It made appealed to the CMC to support its activities financially”, Yuguda added.
He also briefed the journalists that Capital Market Operators (CMOs) were informed of the approval granted by the Minister of Finance, Budget and National Planning on Non-Interest Finance (taxation) regulation which had been gazetted.
According to him, the gazetting has important implication for the market towards encouraging new issuances of Non-Interest Capital Market products and services. It is expected that Issuers and Market Operators will take advantage of this by creating more non interest finance products.
