Financial innovation vital for achieving dynamic economy, says SEC

The Securities and Exchange Commission (SEC) on Wednesday said financial innovation vital for the conception and delivery of a dynamic industrial society.

Its Acting Director-General, Ms. Mary Uduk, who spoke  at  the opening ceremony of a two-day international capital market conference in Lagos, also stressed the need to continuously embrace innovation in market operations and regulation.

The forum was organised by SEC in collaboration with the University of Lagos.

She said the implementation of the 10-year Capital Market Master Plan is already contributing to the growth and development of the nation’s capital market, and by extension, the economy.

“As we move into the future, we need to continuously embrace innovation in the way we carry out our market operations and regulation. Financial innovation is germane for the conception and delivery of a dynamic industrial society. Market participants and regulators have to continually familiarise themselves with the rapid ever-changing economic, regulatory and business environment.

“Beyond the conventional capital market products of equities and bonds as well as manual regulatory processes, the players and regulators in the Nigerian capital market are introducing new and innovative processes and products,” Uduk said.

She described the theme of the Conference: Leveraging the Capital Market for Economic Growth and Development as apt and timely, given the pressing needs to grow the nation’s economy and achieve sustainable development.

“There is no doubt that the capital market can serve as a key catalyst for Nigeria’s economic growth and development, as it offers a credible platform for obtaining long- term financing. As we all know, long-term and affordable funds are required for businesses to thrive and in turn contribute to employment, growth and development.

“Beyond capital market’s contribution to economic growth, we aim at the larger goal of economic development. Added to increased production, the latter entails advancement in the quality of life and living standards of citizens in areas such as improvements in literacy, health and life expectancy, better savings/investment culture, financial inclusion, as well as improved wealth distribution, housing and environment.”

The SEC boss stated further that Capital markets across the world have products and mechanisms to stimulate economic growth and development.

She said although many of such products are available in the country, there are aspects that are still untapped, thereby limiting the realisation of the nation’s potentials.

“One major initiative to tap this potential was the development of a ten-year Capital Market Master Plan (CMMP), launched by the Commission in 2014. The Plan has over 100 initiatives to spring–board the Nigerian capital market as one of the world’s deepest and most liquid, as well as the largest in Africa by 2025.

“It is also aimed at ensuring that the market contributes much more to the socio-economic development of the nation, particularly in facilitating capital-raising for sustainable development and transformation of key sectors,” she said.

She said the successes recorded from these initiatives notwithstanding,  SEC recognises that much more still needed to be done for the capital market to contribute its desired quota and take its rightful place in issues and discussions of the nation’s economic growth and development.

Uduk said some of the SEC’s processes that were previously manual and inefficient are being automated. For instance, with the dematerialisation process completed, investors no longer needed to not worry about the loss or damage to their physical share certificates as they are now electronically stored.

Furthermore, she said the current e-Dividend system enables shareholders’ dividend to be paid directly into their bank accounts without the stress of dealing with physical dividend warrants. Also, the Direct Cash Settlement protects investors from funds mismanagement by ensuring that the proceeds of their shares sales are credited directly into their own account as against.

Uduk said while the current initiatives and efforts are to improve the past towards a better future, there is need to be more innovative to face the dynamic future, both as regulator and operators adding, “future belongs to those that are currently adopting relevant technologies and other improvements for efficiency.”

In his remarks, Lagos State Governor, Mr. Babajide Sanwo-Olu said the state government is interested in the growth and development of the capital market.

Represented by Director, Special Duties Office, Dr. Shamsudeen Allison, the governor said the event is strategic in promoting business and development in Lagos.

Also speaking, Deputy Vice Chancellor of Unilag, Prof Oluwole Familoni said the conference is a good fora to discuss and proffer solutions to some of the problems being faced by the investing public and also an avenue for Nigerians to learn more about the Capital Market.

Familoni expressed the hope that at the end of the conference, the Capital Market will be bette positioned for the development of the economy.

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