The Nigerian Senate’s proposed Investment and Securities Bill of 2024 is facing scrutiny from significant players in the financial sector. With aims to modernize the capital market and replace the Investment and Securities Act of 2007, the bill has sparked a robust debate. Stakeholders, including the Central Bank of Nigeria (CBN) and the Ministry of Finance, voiced their concerns at a recent public hearing held at the National Assembly.
While the bill is geared towards transforming Nigeria’s capital market and enhancing its global competitiveness, the CBN and Finance Ministry argue that some provisions could undermine their authority and regulatory coherence. The debate centers on the powers allocated to the Securities and Exchange Commission (SEC), cash transaction limitations, currency regulations, and the role of the Ministry of Finance.
Contents
CBN’s Concerns Over Expansive SEC Powers
Representing the CBN, Dr. Tukur Galadima raised alarms about the bill’s broad allocation of powers to the SEC, particularly in relation to public companies, including financial institutions under the CBN’s jurisdiction. One of the critical issues raised was the bill’s permission for cash transactions in securities purchases. Dr. Galadima argued that allowing cash purchases could be at odds with anti-money laundering regulations and urged the Senate to limit this aspect of the bill.
“You cannot use cash to buy securities. It is contrary to provisions of the law against money laundering,” Galadima stated, underscoring the CBN’s strict stance on cash transactions in financial investments.
Additionally, Galadima opposed the section allowing investments in multiple currencies, arguing that currency management is exclusively within the CBN’s remit. He recommended that this provision be removed to ensure the CBN maintains complete control over currency regulations within the country’s financial ecosystem.
Ministry of Finance: Concerns on Oversight and Accountability
The Ministry of Finance, represented by Ali Mohammed, Director of the Home Finance Department, expressed concerns over the bill’s provisions that potentially marginalize the Ministry’s oversight role. Specifically, the new legislation excludes a previously mandated requirement for the SEC to report regularly to the Finance Minister on market developments.
Finance Minister Wale Edun, in his statement, highlighted that this gap in reporting could limit the Ministry’s insight into capital market dynamics, potentially hampering regulatory efficiency.
Edun also raised a critical concern over a clause in the draft legislation, which allows SEC board members, including the Director-General, to resign with a three-month notice directly to the President. Edun emphasized that this protocol should include the Finance Ministry, particularly as the Minister is responsible for recommending SEC board appointments.
“If the Director-General or any board member wishes to resign, they should pass it through the Minister of Finance, who recommends their appointment, rather than directly to the President,” Edun argued, underscoring the need to preserve the Ministry’s authority in regulatory appointments.
SEC Defends the Investment and Securities Bill
On the opposing side, the SEC, represented by its Director-General, Dr. Emomotimi Agama, defended the proposed bill, emphasizing its potential to make Nigeria’s capital market competitive globally. Agama highlighted that the bill addresses essential areas such as the development of commodity markets and cryptocurrency regulations, which could transform Nigeria’s economic landscape if the bill passes into law by the year-end.
Agama argued that for Nigeria to position itself as a leader in investment, the proposed legislation is essential, particularly given the recent global surge in digital assets and commodity investments.
Diverse Stakeholders Weigh In on the Bill
The public hearing included feedback from additional stakeholders such as the National Pension Commission (PENCOM), Nigeria Deposit Insurance Corporation (NDIC), and the Chartered Institute of Stockbrokers, who largely supported the bill. They pointed out that a well-structured investment and securities framework is critical for a resilient capital market and an investor-friendly economy.
Senator Osita Izunaso, Chairman of the Senate Committee on Capital Markets, assured stakeholders that their feedback would be considered in the final draft of the bill, which is expected to be ready next week. He also noted that the Accountant-General’s office would be consulted to ensure a smooth process for presidential assent once the bill is passed.
The Investment and Securities Bill of 2024 thus remains under intense scrutiny, reflecting the delicate balance needed to empower the SEC to foster a dynamic capital market without impinging on the roles of established regulatory bodies like the CBN and Ministry of Finance.
Source: Punch NG
JOIN NOW
https://t.me/PAWSOG_bot/PAWS?startapp=6ZSAPFb3
Google News Channel
Follow us on Google News for Latest Headlines
Join Our WhatsApp, Facebook, or Telegram Group For More News, Click This Link Below;
WhatsApp Channel
https://whatsapp.com/channel/0029VaELqhlHVvTXjDnUf80h
WhatsApp Group
https://chat.whatsapp.com/G6Lo3ss6WKLCOqBphZwQGk
Facebook Page
https://facebook.com/allmedia24news
Our Twitter Page
https://www.twitter.com/allmedia24news
Telegram Group
https://www.threads.net/@allmedia24news
