The Securities and Exchange Commission (SEC) is the apex regulatory body for Nigeria’s capital market. It however, operates under the supervision of the Federal Ministry of Finance. The Securities and Exchange Commission, Nigeria, like other exchange commissions elsewhere, regulates the operation of capital market transactions, ensuring that the relevant rules are complied with. It regulates the Nigerian Stock Exchange.
The business of capital formation and mobilisation is at the root of economic development, which is why every economy wants to develop its capital market. Capital markets drive capital mobilisation and allocation to businesses, in the push for economic growth. Through the capital market, companies and governments mobilise capital for investment, while offering opportunity to investors to seek profitable outlets for their funds. Because complex financial processes are often involved, and large numbers of investors participate, the need for guarding the mechanism for those transactions becomes apparent. Investors need to be protected, just as the process needs to be kept viable.
The Securities and Exchange Commission as it is today, is the outcome of the Investments and Securities Act (ISA) No 45 of 1999. However, its seed was actually sown in 1962, when the Capital Issues Committee, an arm of the Central Bank of Nigeria, was set up to evaluate applications from companies wanting to raise capital from the market and recommend for approvals. That committee transmuted to the Capital Market Commission in 1973 and the Securities and Exchange Commission in 1978, by virtue of Decree No. 7 of 1979. The Investment and Securities Act No. 45 of 1999 finally sought to broaden the operation of the Commission and refocus it for more impact on economic growth. ISA 2007 replaced ISA 1999.
Features of SEC
The features of the Commission are that it consists of a chairman appointed by the President and 10 other persons including 2 full-time Commissioners who are 10yrs post call who must be persons with ability, experience and specialised knowledge in capital market matters – section 3 of the ISA. There is a Director-General for the Commission. He is appointed by the President and he is the Chief Executive of the Commission.
Functions of SEC (Section 9 ISA)
- To regulate investment and securities business in Nigeria.
- To register and regulate Capital Market Operators and their functions.
- To register securities of public companies.
- To maintain a register of foreign investment portfolios in Nigeria.
- To render assistance to promoters and investors wishing to establish Securities Exchanges and Capital Trade Points.
- To register and regulate the venture capital funds and collective investments schemes.
- To protect the integrity of the securities market.
- To facilitate the establishment of a nationwide system for securities trading in the Nigerian capital market.
- To facilitate the linking of all markets in securities through modern communication and data processing facilities.
- To review, approve and regulate mergers, acquisitions and other forms of business combinations.
Relevance to corporate law In Nigeria
The relevance to corporate law regime in nigeria is that The Securities and Exchange Commission is consequently there to see to the orderly and rapid development of the capital market. Its basic role is to ensure transparent conduct, such that parties that take decisions, especially on investments, do it on the strength of good information and sound processes. By that, it is to attract more funds into the market and also attract more viable companies that could expand their operations by tapping funds from the capital market.
Contact Information Of The SEC.
Phone: +234 (0) 94621100; +234 (0) 94621168
Head Office – Abuja
SEC TOWERS, Plot 272, Samuel Adesujo Ademulegun Street, Central Business District
3, Idejo Street, Opposite ICON House,
Off Adeola Odeku Street, Victoria Island
African Alliance House (4th Floor), F1, Sani Abacha Way/Airport Road, Opposite KLM Airlines
31 Woji road, GRA phase 2