SEC moves to tackle identity theft in capital market

By Chioma Obinagwam

Nigeria’s apex regulator, the Securities and Exchange Commission (SEC), has said that it is working with other major stakeholders in setting up a committee that will look into and proffer solutions to problems around identity management in the Nigerian capital market.

Acting Director General of the SEC, Mary Uduk stated this in an interview in Abuja Wednesday.

She said, “So for instance, to boost the e-dividend mandate and Direct Cash Settlement initiatives, we are engaging NIBSS (Nigeria Inter-Bank Settlement System) on behalf of the capital market community to facilitate identity validation and account validation in an effort to enhance market processes” she stated.

Uduk also urged shareholders to monitor their investments in the capital market, assuring that the regulator will live up to its responsibilities on investor protection.

She said the Commission has put in place a number of initiatives to protect investors as well as boost their confidence including the e-dividend mandate Management System, Direct Cash Settlement, setting up a committee on identity management in the Nigerian Capital Market Regularization of Multiple Subscription, Complaints Management Framework among others, but however enjoined investors to take ownership of their investments.

According to her, “They have to be able to monitor their investments, attend Annual General Meetings as well as read the annual reports sent out to them. On our part, we protect them through the National Investors Protection Fund (NIPF) Risk Based supervision that enables us to supervise the operators to ensure that they do not do what they are not supposed to do. And again the Complaints Management Framework enables investors to know where to complain to and how long it takes for such complaints to be resolved.

“We advise investors to get their financial advisers to advise them properly on where to invest. In this area, we 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.

Uduk said the Commission is working with other major stakeholders in setting up a committee that will look into and proffer solutions to problems around identity management in the Nigerian capital market.

“So for instance, to boost the e-dividend mandate and Direct Cash Settlement initiatives, we are engaging NIBSS (Nigeria Inter-Bank Settlement System) on behalf of the capital market community to facilitate identity validation and account validation in an effort to enhance market processes,” she stated.

The Acting DG also disclosed that the electronic distribution of annual accounts by public companies to shareholders continues to record tremendous success, as shareholders have largely accepted the new initiative and are willingly providing their email addresses. Alongside other stakeholders, we have continued sensitization to further enlighten shareholders on the benefits of the initiative.

On the need to grow the market for trading in securities on unlisted public companies, Uduk said the SEC is making concerted efforts in collaboration with CAC and other stakeholders to assist public companies that are yet to register their securities to do so without much difficulty.

On the role of technology in the Nigerian Capital market, Uduk said Innovations in financial technology, has made possible the potential of using digital tools to make financial services available to a wider range of consumers and enterprises, promoting financial inclusion and the affordability of financial services, adding “A financially inclusive society will provide increased access to finance, especially for women, help support sustainable growth and will create a million more jobs. The gains of having a more inclusive financial system are enormous, as it helps broaden financial markets and make policies more effective.”

These initiatives she added, continue to highlight and promote developments and trends in the Nigerian Capital Market and drive Financial Inclusion aimed at reducing adult exclusion from financial services.

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