Securities and Exchange Commission (Nigeria)
Encyclopedia
The Securities and Exchange Commission (SEC) is the main regulatory institution of the Nigeria
n capital market.
It is supervised by the Federal Ministry of Finance.
The Nigerian Stock Exchange (NSE) is privately-owned and self-regulating, but the SEC maintains surveillance over it with the mandate of ensuring orderly and equitable dealings in securities, and protecting the market against insider trading abuses.
. The committee became the Security Exchange Commission in 1973, and then the Securities and Exchange Commission was chartered with SEC Decree No. 71 of 1979.
The commission is now chartered by the Investments and Securities Act No 45 of 1999.
A second-tier securities market was established in 1985, and the market grew as the government followed a program of privatization of public sector enterprises.
With market capitalization of N4.46 billion in 1980, by the end of 1997 the Nigerian securities market had a market capitalization of N281.8 billion. The market appeared to be operating efficiently, although it was depressed by low personal incomes in Nigeria and political instability deterring foreign direct investment.
instituted reforms that led to a reduction in the number of banks but a great increase in their size. This and other factors led to a surge in equity market capitalization on the NSE, peaking in March 2008 at US$100 billion, over 60% of which was owned by the banks.
When Musa Al-Faki, a stockbroker, was installed Director General in 2004, many thought his appointment had been engineered by Professor (Mrs.) Ndi Okereke-Onyiuke, head of the Nigerian Stock Exchange. If so, this may have undermined the authority of the SEC as a supervisor during a period of rampant speculation.
The global financial crisis that began in 2008 caused a severe crisis among Nigerian banks, with several forced to close. After the Central Bank had audited the banks in 2009, the SEC started legal proceedings at the Investments and Securities Tribunal against about 260 individuals and entities, alleging that they were involved in abused such as insider dealing and share price manipulation. The commission also instituted various reforms including improving regulations so as to encourage development of the bond market, promoting collective investment schemes and reviewing the 2003 Corporate Governance Code.
SEC Director General Al-Faki resigned in April 2009 amid criticism of the SEC role in a share-manipulation scandal involving the African Petroleum stock. He was eventually replaced by Arunma Oteh
, who became Director General in January 2010. In August 2010 Oteh dismissed Okereke-Onyiuke from the stock exchange.
The President of the Stock Exchange, Alhaji Aliko Dangote, was also dismissed.
In September 2010 it was reported that the SEC was considering converting the stock exchange to a private company rather than a mutually owned enterprise. The SEC said its actions were due to problems at the stock exchange that included "inadequate oversight...ongoing litigation, allegations of financial mismanagement, governance challenges".
Nigeria
Nigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...
n capital market.
It is supervised by the Federal Ministry of Finance.
The Nigerian Stock Exchange (NSE) is privately-owned and self-regulating, but the SEC maintains surveillance over it with the mandate of ensuring orderly and equitable dealings in securities, and protecting the market against insider trading abuses.
Formation and early years
The Commission originates from the ad-hoc, non-statutory Capital Issues Committee established in 1962 as an arm of the Central Bank of NigeriaCentral Bank of Nigeria
The Central Bank of Nigeria was established by the CBN Act of 1958 and commenced operations on July 1, 1959.The major regulatory objectives of the bank as stated in the CBN act of 1958 is to: issue legal tender, maintain the external reserves of the country, promote monetary stability and a sound...
. The committee became the Security Exchange Commission in 1973, and then the Securities and Exchange Commission was chartered with SEC Decree No. 71 of 1979.
The commission is now chartered by the Investments and Securities Act No 45 of 1999.
A second-tier securities market was established in 1985, and the market grew as the government followed a program of privatization of public sector enterprises.
With market capitalization of N4.46 billion in 1980, by the end of 1997 the Nigerian securities market had a market capitalization of N281.8 billion. The market appeared to be operating efficiently, although it was depressed by low personal incomes in Nigeria and political instability deterring foreign direct investment.
2000-2010 capital market boom and bust
During the first half of the 2000s, the Central Bank of NigeriaCentral Bank of Nigeria
The Central Bank of Nigeria was established by the CBN Act of 1958 and commenced operations on July 1, 1959.The major regulatory objectives of the bank as stated in the CBN act of 1958 is to: issue legal tender, maintain the external reserves of the country, promote monetary stability and a sound...
instituted reforms that led to a reduction in the number of banks but a great increase in their size. This and other factors led to a surge in equity market capitalization on the NSE, peaking in March 2008 at US$100 billion, over 60% of which was owned by the banks.
When Musa Al-Faki, a stockbroker, was installed Director General in 2004, many thought his appointment had been engineered by Professor (Mrs.) Ndi Okereke-Onyiuke, head of the Nigerian Stock Exchange. If so, this may have undermined the authority of the SEC as a supervisor during a period of rampant speculation.
The global financial crisis that began in 2008 caused a severe crisis among Nigerian banks, with several forced to close. After the Central Bank had audited the banks in 2009, the SEC started legal proceedings at the Investments and Securities Tribunal against about 260 individuals and entities, alleging that they were involved in abused such as insider dealing and share price manipulation. The commission also instituted various reforms including improving regulations so as to encourage development of the bond market, promoting collective investment schemes and reviewing the 2003 Corporate Governance Code.
SEC Director General Al-Faki resigned in April 2009 amid criticism of the SEC role in a share-manipulation scandal involving the African Petroleum stock. He was eventually replaced by Arunma Oteh
Arunma Oteh
Arunma Oteh became Director General of the Securities and Exchange Commission in Nigeria in January 2010. In this position she is responsible for regulation of Nigeria's capital markets, including the Nigerian Stock Exchange.-Background:...
, who became Director General in January 2010. In August 2010 Oteh dismissed Okereke-Onyiuke from the stock exchange.
The President of the Stock Exchange, Alhaji Aliko Dangote, was also dismissed.
In September 2010 it was reported that the SEC was considering converting the stock exchange to a private company rather than a mutually owned enterprise. The SEC said its actions were due to problems at the stock exchange that included "inadequate oversight...ongoing litigation, allegations of financial mismanagement, governance challenges".
Leaders
- Joseph Oladele SanusiJoseph Oladele SanusiChief Joseph Oladele Sanusi is a Nigerian chartered accountant who was Governor of the Central Bank of Nigeria from May 1999 to May 2004.-Background and qualifications:...
Chief executive (1978–1979)
- John MadakiJohn MadakiColonel John Yahaya Madaki was appointed military governor of Katsina State, Nigeria in December 1989 during the military regime of General Ibrahim Babangida....
Chairman (2001–) - John Edozien Chairman (2005–)
- Udoma Udo UdomaUdoma Udo UdomaUdoma Udo Udoma was elected Senator for the Akwa-Ibom South constituency of Akwa-Ibom State, Nigeria at the start of the Nigerian Fourth Republic, running on the People's Democratic Party platform...
Chairman (2009–)
- Musa Al-Faki, Director General (2004 – May 2009)
- Arunma OtehArunma OtehArunma Oteh became Director General of the Securities and Exchange Commission in Nigeria in January 2010. In this position she is responsible for regulation of Nigeria's capital markets, including the Nigerian Stock Exchange.-Background:...
Director General (January 2010–)