The Securities and Exchange Commission (SEC) and the African Development Bank Group (AfDB) have signed an agreement for a $460,000 grant on a market surveillance system project in order to modernize Nigeria’s capital markets and ensure that they are well positioned to support economic transformation driven by private sector investment.
The grant is to finance technical assistance and capacity building for capital markets development under the “Nigeria Securities Market Surveillance System Project”.
Speaking at the ceremony, Director General, AfDB, Mr. Lamin Barrow said the grant from the Capital Markets Development Trust Fund (CMDTF) – a multi-donor trust fund administered by the African Development Bank-and supported by the Ministry of Finance of Luxembourg and the Ministry of Foreign Trade and Cooperation of the Netherlands, will support the acquisition, installation and deployment of a real-time automated securities market surveillance system of the Nigeria capital markets.
According to Barrow, “Today’s ceremony marks yet another important milestone in our partnership and efforts to modernize Nigeria’s capital markets and ensure that it is well position to support economic transformation driven by private sector investment.
“The introduction of a surveillance system will enhance oversight over securities trading across all existing and future trading platforms and all tradable securities and products by the SEC. It will therefore preserve securities market integrity, boost investor confidence and enhance financial inclusion, among other expected outcomes.
According to the AfDB DG, the design of the technical assistance project incorporates training activities to strengthen the capacity of users of the securities market surveillance system, as well as the preparation of relevant operational manuals and workflow processing and document management for the surveillance solution, to ensure sound implementation and sustainability.
Mr. Lamido Yuguda, Director General of the SEC, stated in his remarks that the SEC is glad and grateful to AfDB for providing grant funding to carry out these critical initiatives, notably the project to buy a surveillance solution.
Yuguda said a market surveillance system is required to aid the regulator in detecting and addressing market abuse as quickly and efficiently as possible and to proactively prevent major infractions. An automated market surveillance tool will enhance the Commission’s role in investor protection, as well as ensure a transparent, fair and orderly market and reduce systemic risk.
According to the SEC Boss, “With the successful acquisition of a surveillance solution for the Commission the SEC expects the following outcomes: The curtailment of market infractions; A modernized and technology driven regulatory approach which enhances the protection of investors; Enhanced investor confidence leading to the increased participation of domestic investors (both institutional and retail) in the capital market.
He said the surveillance solution would also have an increased impact on GDP through the capital market’s role in the efficient intermediation and allocation of capital to the real economy to create jobs, encourage savings and facilitate wealth creation, as well as increase investment in the economy through foreign direct investment and growth in the rate of domestic investor participation in our markets.
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