E-Financial
SEC Urges Credit Rating Agencies to Focus on Investor Protection
The Securities & Exchange Commission (SEC) has admonished Credit Rating Agencies (CRAs) operating in Nigeria to focus on investors’ protection in all their dealings, services and activities within the capital market.
This was contained in the goodwill message delivered on behalf of Mallam Lamido Yuguda, the Director General of the Commission, by its Head of Monitoring Department, Mr Adamu Sambo at the inaugural Edition of DataPro’s Annual Webinar on Credit Rating Imperatives for Issuers and investors held in Lagos.
The webinar, attended by participants from different parts of the world, was hosted by DataPro, a technology-driven Credit Rating Agency and the Association of Issuing Houses of Nigeria (AIHN).
In his welcome address, the Managing Director and Chief Executive Officer of DataPro, Mr Abimbola Adeseyoju called for greater socialisation of the crucial role played by Credit Rating Agencies in the efficient allocation of capital and resources within the economy.
According to Mr Adeseyoju, DataPro will henceforth be charting a new course in the CRAs industry in Nigeria and focusing on the way forward as well as on how Investors and Issuers alike can adapt to the new normal and drive economic growth and development through the various securities, products and services available in the Nigerian Debt Market.
In the keynote address, titled “Galvanising the Capacity of the Nigerian Debt Capital Market”, delivered by Mr Bola Onadele Koko, the Chief Executive Officer of FMDQ Group, he said that the COVID-19 pandemic negatively affected the new wave of globalisation with massive decline in World Trade, Foreign Direct Investment (FDI) and net travel leading to a 3% traction on Global GDP in 2020.
Goodwill messages were delivered by Mrs Tinuade Awe, the CEO of NGX Regulation; Mr Philip Oduoza, the Chairman of Nova Merchant Bank Limited and Mr Akin Akeredolu-Ale, the Managing Director of Lagos Commodities & Futures Exchange (LCFE), who all emphasised on the crucial role Credit Rating Agencies play within the Market and praised the initiative of DataPro and AIHN to organise the Webinar.
While speaking on the possibility of SME’s getting an Investment Rating Grade, Mr Oladele Adeoye, the Chief Rating Officer of DataPro, mentioned that although size is important, other parameters such as Diversity of Earnings, Earning profiles, Cashflow and Corporate Governance are major considerations to focus on by the entities.
Mrs Funke Okoya on her part mentioned that the low-interest rate and capital market diversification are favourable terms for Issuers and Investors to explore in the market. In terms of regulation and supervision in the capital market, she commented that the stance of the new leadership at SEC and globally is the adoption of “Regulation as Service” philosophy.
For Mr Jacques Piekarski, a platform such as the one created by DataPro and AIHN should be upheld so as to enable all stakeholders to get informed and acquainted with trends, patterns and emerging issues.
In bringing the webinar to a close, DataPro unveiled two products offering a rebranded and New Look Rating Report and a Rating Guide Dashboard for Investors.
Nigeria Deposit Insurance Corporation (NDIC) has said that it has obtained Winding up Orders for 96 out of 183 microfinance and primary mortgage banks whose licenses were revoked by the Central Bank of Nigeria (CBN) in May 2023.
Bello Hassa, managing director, NDIC, stated this at a sensitisation seminar for Judges of the Federal High Court in Lagos organised by the NDIC, to enlighten the judiciary on the intricacies of the banking industry.
Hassan said, “As at date, the Corporation had obtained Winding up Orders for 96 out of 183 Micro Finance and Primary Mortgage Banks whose licenses were revoked by the CBN in May 2023, in less than one Year of revocation.”
He added that the NDIC was committed to fulfilling its mandate of protecting depositors through bank supervision, failure resolution and liquidation so as to boost confidence in the financial system.
Speaking on the role that the judiciary plays in the fulfillment of the mandate, Hassan said, “We recognise the judiciary as one of our critical stakeholders. With this, when cases are brought before them, they can receive accelerated hearing and proclamation of Justice.”
Citing some of the achievements from previous editions of the seminar, Hassan said that instances where liquidation-related litigations experienced delays were reduced.
Central Bank of Nigeria (CBN) has withdrawn its earlier circular directing financial institutions to implement the national 0.5 per cent cyber security levy after the policy was largely resisted.
The withdrawal of the circular was announced via a statement signed by Haruna Mustafa, director, Financial Policy and Regulation, Department and Chibuzo Efobi, director, Payment System Management Department.
The apex bank confirmed the suspension in a circular issued on May 17, 2024 with reference number PSMD/DIR/PUB/LAB/017/005 addressed to commercial banks, mobile money operators, and other financial institutions.
In an earlier circular issued on May 6, 2024 with reference PSMD/DIR/PUB/LAB/017/004, the bank mandated financial institutions to charge a 0.5 per cent levy on all electronic transactions.
President Bola Tinubu last week ordered the suspension of the National Cybersecurity levy.
The Association of Bureau De Change Operators of Nigeria (ABCON) has called for the Securities and Exchange Commission (SEC) guidance and collaboration in harmonising the peer-to-peer forex sector in the country.
At an official courtesy visit to the newly appointed SEC Director-General, Dr. Timi Agama, the President of Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe, who congratulated the SEC D-G on his appointment, observed that SEC regulates the sector that continues to threaten the existence of BDCs in Nigeria through online virtual transactions platforms which give access to millions of Nigerians to trade in foreign exchange without trace and accountability.
He also explained that ABCON has invested in requisite technology to ensure the continued existence of the business and the preservation of the integrity of the sub-sector, stressing that the future of BDC’s business was digital currency. The ABCON boss said that the meeting with the SEC DG and his executive board was a follow up to an earlier online virtual consultation.
Gwadabe explained that ABCON, the umbrella body for all licensed retail foreign exchange dealers, was established in 1991 to liaise with regulators, relevant stakeholders and security agencies for a transparent retail end forex market.
Gwadabe said: “As at today, there are over 34 million Nigerians dealing in digital currency and the number is rising by about nine percent with a huge market of $9 billion annually. There are thousands of multichannel virtual currency FX platforms and none is indigenous to Nigeria, adding that P2P represents individual-to-individual transaction.
“To automate the entire foreign exchange retail market, ABCON has partnered with the Commodities Exchange Board in building the platform knowing that they have sources of foreign exchange. ABCON is willing to work with SEC towards achieving full automation of the retail end of the foreign exchange market in Nigeria.
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