SEC moves to review framework on govt., corporates borrowing

Bamidele Famoofo

The Securities and Exchange Commission has said it would improve the regulatory framework on borrowing by governments and corporates.

Emomotimi Agama, director general of the commission, said this has become important given the Supreme Court order on direct subvention from the federal government to the 774 local government areas

He noted the critical role borrowing plays in the financial system and the commission want to be sure of sustainability in both government borrowing, municipal and state governments.

He said, “Improving the framework for borrowing is very important because borrowing is part of the financial system and we can only make much of the move we want to make if there is enough funding”.

“It therefore becomes important that we have in the management of such resources via strategic and focused borrowing to help the developments in those sectors”.

For corporates, the SEC DG said the Commission is changing the landscape with the new rules on Central Counter Parties adding that the new rules on CCPs have become so critical for Nigeria’s development, especially for corporates in raising capital.

“As a Commission we have established those new rules and they are going to be functional in 2025. We want to make borrowing a seamless and effortless process for Nigerian companies.

“It is very important that as we drive the growth of the Nigerian capital market, we also drive new products and new opportunities for every Nigerian”.

Nigeria for a long time has been seen as a mono product market, but the commission wants to drive the introduction of derivatives into the capital market in 2025 to make the year different.

“That is not possible without the laws and regulations that will help us do this better. To build confidence in derivatives trading, we hope to provide a clear direction of these transactions. To build confidence in derivatives trading, we aim to provide a clear exemption of these transactions from general insolvency laws, creating a safer and more predictable trading environment,” he stated.

Agama said the Commission is creating a safer trading environment, building confidence and attracting more players to the market, hence, it must provide enabling regulations and laws.