Capital market crash: NSE defends tight regulation

In a bid to prevent another crash of the Nigerian capital market, the Nigerian Stock Exchange, NSE, weekend said the regulators introduced tight regulatory regime which had led to increased investor confidence and recovery of some money lost by investors during the global financial meltdown.

The Chief Executive Officer, NSE, Mr. Oscar Onyema, who spoke against the recent decline in the share prices of companies quoted on the NSE said “ Following the 2008 global financial crisis, the Federal Government of Nigeria, in conjunction with The NSE and its regulator, the Securities and Exchange Commission of Nigeria, SEC as well as the Central Bank of Nigeria (CBN), embarked upon several key initiatives to ensure the Nigerian capital market and the financial market emerged stronger and more resilient.

The focus of this transformation was to

strengthen the regulatory framework to ensure a safe investment destination for both local and foreign investors while establishing a favorable business environment for companies to thrive.

He said with the immense support from capital market participants and various agencies in Nigeria, the NSE has made great strides in its transformation journey which has brought about major review of its governance, market structure and operations thereby resulting in a stronger regulatory environment, and the implementation of innovations required for delivering a robust and efficient capital market.

Bola Adeeko, Executive Director, Corporate Services of the NSE, who represented Mr Onyema at the capital market correspondents workshop held in Lagos said “To enable the market sustain the momentum the NSE has recently ensured that its implementation of medium- to long-term strategic initiatives remain a key priority. Both SEC and NSE have played critical roles to continue to support the Nigerian Capital Market, enabling it to build upon its strengths and ensuring Nigeria is an attractive market.

As we shift gear into a growth phase, our combined triumph hinges on the successes we have celebrated thus far.”

While highlighting some major landmarks achieved in the capital market since 2011, he said, “When we commenced the journey to transform the Exchange in 2011, we started with Corporate Governance. We embedded appropriate governance in all of our dealings from the National Council, to its committees, all the way down to the day-to-day operations of the Exchange.

We developed, documented, optimised and automated multiple policies and procedures to achieve operational efficiency. Today, we hold ourselves to the same standards we ask of our listed companies. In an effort to raise our level of competitiveness, the Exchange launched the Corporate Governance Rating System (CGRS) for listed companies in partnership with the Convention on Business Integrity (CBi).

By remaining at the forefront of promoting good business practices, we can further increase our contributions toward the sustainable development of our listed companies, and invariably, the economy.”

He further noted that a strong regulatory environment was essential to protecting investors against infractions and enhancing investor confidence in the market, adding “We have worked tirelessly to revise key rules for dealing members and issuers, and developed several new rules to create the much needed order, equitable treatment, efficiency and protection for all participants in our market.”

Vanguard