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CBN governor, Yemi Cardoso
Key government agencies and stakeholders have expressed differing concerns over the proposed Investment and Securities Bill 2024.
The bill, which is intended to repeal the Investment and Securities Act of 2007 and enact new regulations for Nigeria’s capital market, drew feedback from the Central Bank of Nigeria and the Ministry of Finance, who caution that certain provisions could create friction and reduce oversight.
The various stakeholders raised their concerns at a public hearing held on Thursday, at the National Assembly complex.
Representing the CBN, Dr Tukur Galadima voiced opposition to the expansive powers the bill grants the Securities and Exchange Commission over public companies, particularly financial institutions under the CBN’s jurisdiction.
Galadima argued against allowing cash transactions for securities purchases, citing anti-money laundering laws, and urged the Senate to remove a section permitting investments in multiple currencies, stating, “The issue of currency is strictly with CBN.”
“You cannot use cash to buy securities. It is contrary to the provisions of law against money laundering,” he added.
However, he noted that aside from these concerns, the CBN broadly supports the bill’s objectives for enhancing the capital market.
Similarly, Finance Minister Wale Edun raised concerns that the bill, while aiming to modernize capital market regulation, may limit the role of the Finance Ministry in critical oversight functions.
Speaking on his behalf, the Director of the Home Finance Department, Ali Mohammed, pointed out that the proposed legislation omits a previous requirement for the SEC to report market updates to the Finance Minister.
Edun argued that this lack of reporting could lead to a gap in the ministry’s awareness of market developments, potentially weakening regulatory coherence.
Edun also highlighted a provision that allows SEC board members, including the Director General, to resign with a three-month notice directly to the President.
He contended that such decisions should involve the Finance Minister, as it is the minister who recommends board appointments.
Additionally, the minister highlighted a clause in Section 2 of the draft legislation allowing any member of the Board, including the Director General, to resign by giving three months’ notice directly to the President.
The Minister contended that this authority should rest with him, especially as another section of the Bill specifies that the Finance Minister should recommend appointments for the Director General.
He stated, “We feel that if that particular aspect is being afforded for the Director General or any member of the Board to resign, he has to pass it through the Minister of Finance who recommends his appointment, not sending it directly to the President because that would erode the role of the Honorable Minister of Finance.”
However, in his presentation, the Director-General of SEC, Dr Emomotimi Agama, defended the Bill, emphasizing its potential to position Nigeria’s capital market competitively on the global stage.
He stated, “For Nigeria to excel among nations, the proposed law must pass before year-end. It promises to transform the economy in areas such as commodity markets and cryptocurrency.”
Various stakeholders, including PENCOM, the Nigeria Deposit Insurance Corporation, and the Chartered Institute of Stockbrokers, lent their support to the Bill.
The Chairman of the Senate Committee on Capital Market, Senator Osita Izunaso, assured stakeholders that their input would shape the final draft, which is expected next week.
He also called for the Accountant-General’s involvement to prevent any impediments to presidential assent once passed.
