New SEC leadership to continue with Capital Market Master Plan -Uduk

April 26th, 2018

Ms. Mary Uduk is the Acting Director-General of the Securities and Exchange Commission (SEC). Last week, SEC hosted the first Capital Market CommitteeA�(CMC) Meeting of the year in Lagos. Ms Uduk is this interview with journalists spoke on the outcome of the meeting and other issues affecting the market. Obas Esiedesa, was there.

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What were some of the high points of the meeting?

The CMC over the past 18 years hasA�proven to be an important platform that brings together stakeholders of the capital market to discuss issues germane to the development and orderly conduct of the market.

During the meeting, the new Executive ManagementA�solicited the support of all stakeholders and acknowledged the enormous challenges before us and expressed our commitment to ensure that we deliver on the mission and vision of the Commission.

We discussed theA�Commissiona��sA�efforts in collaborationA�withA�theA�National Educational Research and Development Council (NERDC) to institute a stand-alone capital market curriculum for basic and senior secondary education inA�the country. To this end, trade groups made commitments at the meeting to support this initiative.A�

Further, the Technical Committee working on developing a vibrant commodities market for Nigeria presented its report at the meeting.A�We agreed that the report will be exposed to the public to elicit comments and inputs from all stakeholders.

The Commission alsoA�updatedA�the market on the status of itsA�databaseA�registration exerciseA�forA�Capital Market Operators (CMOs). The SEC website now has a list of all CMOs and their functions.A�Stakeholders were also informed that the Commission has issued a new set of registration certificates to operators without expiry datesA�and theseA�are available at our head office and Lagos Zonal Office.

The CMC noted that the distribution of electronic annual accounts of public companies has commenced. However, we also received feedback on concerns from some Shareholders Associations.A�It was resolved that theA�market will deliberate further on the matter while the pilot period of one year would be allowed to go on.

What is the commission doing to attract companies that areA�notA�listed on the exchange?

In as much as the capital market will like to attract as many companies as possible, the decision to be listed rests with the individual companies. All we do is to encourage companies and let them see the benefits of being listed. However, all public companies, whether listed or not, are expected to register their securities with the Commission.A�We also have rules stipulating that shares of public companies can only be transferred on SEC-approved trading platforms/exchanges. Thus, even when a company delists, its shares can still be traded on, say, NASD OTC Plc.A� In addition, the Commission is liaising with theA�CorporateA�Affairs CommissionA�to ensure that companies comply with registration of their securities and exchanging such securities only on SEC-approved platforms.A�

What are the terms ofA�referenceA�of the Committee on Listing?

The mandate of the Committee is to drive advocacy and other activities towards increasing the number of listed companies on our exchanges.A�Their broad terms of reference areA�to propose strategies to attract listings from target sectors;A�undertake relevant advocacyA�as well asA�other activity that may be relevant to the achievement ofA�thisA�mandate.

NewA�mandate given to that committee is to find out why a number of companies are delisting. Are there regulatoryA�issues;A�is it that they are having issues with compliance with our regulations? We have given them a mandate to come up with recommendations so that if we need to amend our rules to attract more listing we will look at international best practicesA�and do that. If we have to talk to other government agencies and stakeholders we willA�equallyA�doA�so.

The new SEC management which you lead is about two weeks old, what are you going to do differentlyA�to boost investorsa�� confidence?

Members of the new management team have worked in the Commission for many years with experiences in different department of the Commission and aspects of the capital market. We have always been part of the Commissiona��s efforts at improving investorsa�� confidence and implementing the Capital Market Master Plan.A�

The Master PlanA�will continue to be our working document andA�weA�shall continue to implement initiatives that will promote investorsa�� confidence such as E-Dividend registration, Direct Cash Settlement, Dematerialization, Complaint Management Framework, Financial Literacy and Investorsa�� Protection Fund, among others.A�

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SEC closed the window onA�freeA�e-dividend registration in March, how will this affect shareholders who are yet to enroll?

It is important to state that e-dividend registration has not ended; it is free registration that endedA�31 March 2018.A�Before the deadline, the Commission was bearing the cost of registration, but the new directionA�nowA�is that banks and NIBSS,A�along with registrars will charge aA�token sum of N150 per mandate.A�We are still soliciting for co-operation from the public to key into electronic dividend payment as this is what will address the fundamental issueA�of unclaimed dividend.

What is the total number of approved mandates?

As at end of March, 2018,A�the total approved mandatesA�wereA�2.49A�million translating into 466,000 unique investor accountsA�

What isA�SEC doing to promoteA�electronic IPO?

Globally, capital markets are moving towards Electronic IPOs (e-IPO) and the Nigerian Capital Market is working to adopt this trend. A committee was set up during the meeting comprising the Securities and Exchange Commission (SEC), Nigeria Stock Exchange (NSE), Association of Issuing Houses of Nigeria (AIHN), Association of Stock Brokers (ASHON), Central Securities and Clearing System(CSCS), Institute of Capital Market Registrars (ICMR), Capital market Solicitor Association(CMSA), Fund Managers Association of Nigeria (FMAN), and NIBSS

What is the latest on multipleA�subscriptionsA�and forbearance?

On multiple subscriptions and forbearance for shareholders with multiple accounts, the forbearance window has now been extended to September 2018. Registrars have acknowledged that investors have started coming forward but there areA�still someA�challenges in the process. The CMC deliberated and recommended the appropriate Technical Committee to seek input and come up with recommendations to address these challenges. Therefore, we encourage all affected investors to come forward and take advantage of the window before the new deadline.

What other issues did the CMC consider?

The Technical Committee on Non-Interest capital marketA�alsoA�presented its report and notedA�that the first sovereign sukukA�whichA�was issued in 2017A�hadA�about 1,600 retail investorsA�that invested N5 billion in the instrument.A�The Committeea��sA�next level of engagements is to work with supra-national entities (such as IFC, AfDB), state governments, institutions (such as Federal Mortgage Bank, NMRC) to include sukuk options in their capital investment plans.

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