SEC Calls on Banks to Enhance Corporate Governance Amid Recapitalisation Efforts

From left; Group CEO; Cowry Asset Management Limited; Mr. Johnson Chukwu; Group Chairman, NGX Group Plc; Alhaji, Dr. Umar Kwairanga, Chairman, Capital Market Correspondents Association of Nigeria (CAMCAN): Mrs. Chinyere Joel-Nwokeoma and Divisional Head; (Legal and Enforcement) the Securities and Exchange Commission (SEC); Mr. John Achile represented the Director General of SEC; Dr. Emomotimi Agama, during the CAMCAN 2024 annual workshop held on Saturday in Lagos.

The Securities and Exchange Commission (SEC) has urged banks to reinforce their corporate governance principles and risk management frameworks to bolster investor confidence during the ongoing recapitalisation exercise. This call was made at the recent annual workshop of the Capital Market Correspondents Association of Nigeria (CAMCAN), held in Lagos.

Dr. Emomotimi Agama, the SEC Director-General, reiterated the commission’s commitment to transparency and efficiency in the recapitalisation process. Represented by Mr. John Achile, Divisional Head of Legal and Enforcement, Agama emphasized the importance of bridging the gap between issuers and investors through innovation-driven inclusive growth.

“The framework on banking sector recapitalisation (2024–2026) provides clear guidance for issuers while safeguarding the interests of investors,” Agama stated. He added that SEC is integrating blockchain technology into transaction processing to ensure secure and transparent operations, which would redefine trust within the capital market.

The oversubscription of recapitalisation offers in 2024 reflects strong investor confidence, he noted. To maintain this momentum, SEC has focused on enhancing disclosure standards and corporate governance practices. Agama outlined plans to expand financial literacy campaigns and partner with fintech companies to offer low-barrier investment options, making the capital market more accessible.

“Our mission is to create an enabling environment for seamless and transparent capital formation,” Agama said. He highlighted key strategies such as reducing bureaucratic bottlenecks through digitalisation, maintaining open communication with stakeholders, and improving regulatory oversight to protect investors and promote market integrity.

However, he acknowledged the challenges in the recapitalisation exercise, including market volatility, systemic risks, limited retail participation, and investor skepticism regarding transparency and accountability. On the other hand, opportunities such as leveraging technology to enhance market liquidity and developing innovative financial products like green bonds and sukuk were identified as potential growth drivers.

At a panel session, Achile reaffirmed SEC’s oversight of all market operations, including technology and infrastructure. “We are committed to transparency because we understand both the benefits and risks associated with technology adoption. SEC conducts thorough due diligence on all market innovations to ensure compliance with regulatory requirements,” he said.

Addressing the issue of unclaimed dividends, Achile attributed it to an information gap and investors’ non-compliance with regulatory requirements. Despite these challenges, he assured stakeholders that SEC would continue to strengthen its dual role of regulation and investor protection to build trust and confidence in the capital market.

The SEC stressed the importance of collaboration among regulators, issuers, and investors to ensure the success of recapitalisation efforts and drive inclusive growth in Nigeria’s financial sector.