The Securities and Exchange Commission (SEC)’s bold move in reducing time for companies to obtain approval for offers may have once again put the commission under scrutiny.
Concerned analysts say the SEC’s approved time.cut may boost market efficiency as well as risks unless inherent and systemic challenges in public institutions are addressed urgently.
Under the new time frame SEC, in a statement released on Monday said the approval time which hitherto took over one year will now take just two weeks, but contigent on completion of all necessary documents.
Acknowledging the determination of the current Director General, Dr. Emomotimi Agama to take the Commission to greater heights through transparent and purposeful leadership, the analysts fear that external influences, systemic and vested interests, typical of public institutions may hinder effective implementation.
“The capital market is the lifeblood of any economy and is regulated by time. One of the first things we tackled was to reduce the time to market. I can proudly say that we have reduced the time to market from over a year to fourteen days,” SEC stated.
The commission, in the statement, noted that issuers are no longer experiencing delays in their applications due to various mechanisms adopted to ensure swift processing and timely approvals.
The commission also took credit for what it described as the success of the recent banking recapitalization exercise, during which banks raised over N2.2 trillion from the capital market using the electronic offering platform.
“All of these transactions have been fully subscribed, and we have encouraged the use of technology. The e-offering platform means you do not have to use paper anymore to apply in this market. We hope to get better by the day,” the SEC added.
The Commission also emphasized the importance of technology in modernizing the capital market.
“Technology is the in-thing, and the ISA 2007 has provided for that. The NGX has an e-IPO system that has proven to be very effective. All of the offers that came within this period were approved within 14 days as promised. In this year, we will make more use of technology in the work that we do,” the SEC said.
However, some analysts observe that, while this could further improve the efficiency of the capital market: allow companies to access funds more quickly, increase competitiveness for more investments and businesses and overall contribute to Nigeria’s economic growth, it’s own bureaucratic processes could delay implementation of the policy.
They hinge their fears on recent operations of some risky ponzi and investment schemes which generated alot of arguments on the supervisory capability of the Commission and other regulatory bodies.
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Recently, SEC warned Nigerians against investing in Risevest and Stecs, claiming that Risevest, which is still operating and advertising is operating illegally, and that Nigerians are at at risk of fraud.
“unless SEC improves on its internal operations and mechanisms, the reduced approval time may increase the risks associated with ponzi schemes and unregulated investments, slipping through the cracks, as seen in the past with some cryptocurrency businesses,” says an analyst.
“The accusations and counter accusations between SEC and CBN, (Central Bank of Nigeria) in the recent past over operation of Binance Cryptocurrency and alleged loss of billions of dollars in the economy due to their operations are still fresh in our mind,” says another analyst.
In September, 2024, SEC said it had granted approval in principle to two crypto exchanges to provide Nigerian youths with opportunities for capital market participation.
Agama, its Director General, stated that the decision to approve the crypto exchanges was driven by the need to create an inclusive financial ecosystem that leverages the growing interest in digital assets among Nigeria’s younger population.
The approval, which came out after several months of waiting by applicants, may have inclined the analysts to note that SEC may face challenges in implementing the new policy due to limited resources, including personnel and technology.
According to them, president Donald Trump’s favourable disposition to Cryptocurrency investments may gave placed moral burden on Exchanges in Nigeria and South Saharan African countries.
