SEC Director General Urges Embrace of Innovation for Sustainable Growth in Capital Market

Lagos, Nigeria – June 19, 2024: Emomotimi Agama, the Director General of the Securities and Exchange Commission (SEC), has called on capital market operators to adopt innovative approaches as essential for driving sustainable growth, enhancing efficiency, transparency, and fortifying resilience within Nigeria’s capital market. Agama made this statement at the 2024 Capital Market Solicitors Association Annual Business Summit in Lagos, themed “Revolutionising the Nigerian Capital Market through Innovative Financial Instruments for Sustainable Development.”

Agama emphasized the SEC’s commitment to adapting regulations to support emerging financial products and technologies, which is crucial for fostering a robust and dependable capital market ecosystem. “In its efforts to support innovation and growth in the market, the SEC has established a program of assessment called Regulatory Incubation to help new fintech businesses,” Agama explained. This initiative permits fintech firms to operate for one year within a controlled regulatory environment while the SEC formulates rules to address the challenges posed by these technologies.

The SEC’s Regulatory Incubation Programme is central to its strategy, enabling the commission to create relevant rules that cater to new financial technologies, ensuring investor protection and market stability. This program is part of the broader Revised Capital Market Master Plan (CMMP 2021-2025), which aims to leverage technology to expand and deepen the Nigerian capital market.

Agama also highlighted the associated risks of embracing innovation, including cybersecurity threats, regulatory complexities, and market volatility. He stressed the need for robust risk management frameworks to mitigate these risks and ensure investor confidence through transparency and effective communication.

“While the potential of innovation is undeniable, embracing it also comes with challenges. Hence, we must be mindful that the exploration of new instruments must be balanced with robust risk management frameworks,” Agama said. He assured that the SEC would implement appropriate safeguards to protect investors and maintain market stability.

He commended the collaborative efforts among stakeholders at the Summit, underscoring the importance of continuous dialogue and improvement. “The success of these initiatives demands collaboration by all stakeholders, including the CMSA, legal professionals, regulators, and market participants. We must create a forum for open dialogue and continuous improvement,” Agama noted.

The SEC reiterated that the safety of investors and their investments is a primary reason for the initiation of the regulatory incubation program for fintechs. This program aims to support innovation while maintaining the integrity and stability of the capital market through comprehensive risk management and regulatory oversight.

The Summit gathered key stakeholders who discussed the future of Nigeria’s capital market and the role of innovative financial instruments in fostering sustainable development, reflecting the SEC’s proactive approach to adapting to technological advancements while ensuring market stability.

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