SEC Urges Innovation in Nigerian Capital Market for Sustainable Growth

The Director General of the Securities and Exchange Commission (SEC), Emomotimi Agama, has called on capital market operators to embrace innovation as a key driver of sustainable growth, efficiency, transparency, and resilience within Nigeria’s capital market.

Speaking 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 emphasised the SEC’s proactive stance in adapting regulations to accommodate emerging financial products and services driven by technology.

“In its efforts to support innovation and growth in the market, the SEC has established a programme of assessment called Regulatory Incubation to help new fintech businesses. The programme allows them to operate for one year within a highly fortified and limited regulatory perimeter while the SEC develops applicable rules that address these innovative technologies,” Agama explained.

He added that the incubation programme ensures investor protection and market stability while fostering financial technology advancements in the Nigerian capital market. Central to the SEC’s strategy is the Revised Capital Market Master Plan (CMMP 2021-2025), which aims to leverage technology and innovation to expand the depth and breadth of the Nigerian capital market.

Agama cautioned stakeholders about associated risks such as cybersecurity threats, regulatory complexities, and market volatility. “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. The SEC will ensure appropriate safeguards are in place to protect investors and maintain market stability,” he noted.

He commended the collaboration among stakeholders at the Summit, emphasising the need for 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.”

The SEC’s regulatory incubation programme for fintechs is designed to ensure the safety of investors and their investments in the capital market.