The Nigeria Securities and Exchange Commission (SEC), has affirmed willingness to adapt capital market regulations to meet the needs of emerging financial technologies and innovations.
Dr. Emomotimi Agama, director general, Securities and Exchange Commission (SEC), said the organization is aware of the new financial products and services that are emerging due to technology and is committed to adapting its regulations to address these innovations.
Agama spoke as the keynote speaker at the 2024 Capital Market Solicitors Association Annual Business Summit in Lagos with the theme “Revolutionizing the Nigerian Capital Market through Innovative Financial Instruments for Sustainable Development”.
According to him, the commission has a three-pronged approach to regulating innovation: safety, market deepening, and solutions to problems, which has always helped to create a more efficient and reliable capital market ecosystem.
“In the efforts to support the innovation and growth in the market, the SEC had established a programme of assessment called Regulatory Incubation to help new FinTech businesses.
The programme allows them to operate for one year within a highly fortified and limited regulatory perimeter, while the SEC develops applicable rules that address these innovative technologies.
The incubation programme helps ensure investor protection and market stability while fostering financial technology advancements in the Nigerian capital market,” Agama said.
The SEC Boss, reiterated that one of the cardinal objectives of the Revised Capital Market Master Plan (CMMP 2021-2025), is to leverage technology and innovation to expand the depth and breadth of the Nigerian capital market, to enable it contribute significantly to national economic development.
“In order to facilitate the success of the RCMMP, a major task before the Securities and Exchange Commission, is creating an enabling regulatory and supervisory environment for innovation to thrive as means of deepening the Nigerian Capital Market in terms of new products & processes,” Agama said.
He however cautioned that as the market embraces innovation, operators and participants must remain vigilant to the risks they entail, including cybersecurity threats, regulatory complexities, and market volatility.
According to him, while the potential of innovation is undeniable, embracing it also comes with challenges. Hence, the market must be mindful that exploration of new instruments must be balanced with robust risk management frameworks.
He further noted that the SEC would ensure appropriate safeguards are in place to protect investors and maintain market stability. “Investor confidence is the bedrock of any successful market. Fostering trust in innovative instruments through transparency and clear communication will be key.
“The success of these initiatives demands collaboration by all stakeholders, including the CMSA, legal professionals, regulators, and market participants. We must create a forum for open dialogue and continuous improvement,” Agama said.
He urged stakeholders in the capital market to embrace innovation as a catalyst for growth, increased efficiency, heightened transparency, and resilience.
Agama also commended the organizers of the event for bringing together thought leaders from diverse sectors of finance, law and the capital market, alongside regulators and operators, to exchange insights towards advancing the Nigerian capital market and by extension, the Nigerian economy.
