Capital market: SEC to shield investors from high charges

The Securities and Exchange Commission, SEC, Wednesday, disclosed that it was taking steps to reduce transaction costs in the Nigerian capital market, to shield investors from high charges.

In a statement in Abuja, Mary Uduk, acting director-general of SEC, who was speaking during a meeting with the Association of Corporate Trustees, stated that its decision to bring down the capital market charges was in a bid to ensure that investors do not bear unnecessary costs.

Uduk, who was represented by Isyaku Tilde, acting executive commissioner, operations of SEC, also reiterated the determination of the commission to ensure that the investors in the Nigerian capital market are adequately protected in all transactions. She explained that the responsibility of the SEC was to ensure that investors are not shortchanged in any transactions in the market and therefore urged them to participate in the market to grow it.

She said, “We are doing a lot to boost investors’ confidence in our market. But I want to say that both local and foreign investors are very good for the market. For instance, the foreign investors, because they trade their shares all of the time it leads to price discovery as against the local investors that just take a long term view on their investments.

“Investors’ fears can be of two folds, firstly they could be afraid because they feel that capital market operators will mismanage their investments, secondly is looking at the volatility of the market that makes investors skeptical. “For the first scenario, we have a number of initiatives that we have put in place to boost investors’ confidence. We have the e-dividend mandate system, the direct cash Settlement as well as multiple subscriptions in place. For the second category, investors have to take ownership of their investments. They have to be able to monitor their investments, attend Annual General Meetings as well as read the annual reports sent out to them.”

Uduk further stated that investors are also protected through the National Investors Protection Fund, NIPF, Risk Based supervision that enables the SEC to supervise the operators to ensure that they do not do what they are not supposed to do.

According to her, the complaints management framework enables investors to know where to complain to and how long it takes for such complaints to be resolved, adding that for those investors that are averse to risk, they should get their financial advisers to advise them properly on where to invest.

“We also advise retail investors to invest in Collective Investment Schemes and Mutual Funds because those are managed independently by professionals and they are diversified thereby reducing risks. We are committed to protecting investors in the work we do. We will keep working on our rules and the possibility of amending them when the need arises, we want more transparency in the market so that investors will feel comfortable and the market can be better.” Uduk added.

In her remarks, Tokunboh Ajayi ,president of the Association of Corporate Trustees, said members of the association are committed to attracting investors to the market without encumbering them with costs and commended the SEC on its efforts in transaction costs reduction. “This market is dynamic and that is why as a group we keep on evolving and devising ways to make the market better. We will continue to render our best and ensure our members operate within the confines of the rules and regulations in the market” she stated.