The Securities and Exchange Commission (SEC) has expressed its willingness to improve the regulatory framework on government and corporate borrowing.
The Director General of the Commission, Dr. Emomotimi Agama, who disclosed this in a chat, said this has become important given the critical role that borrowing plays in the financial system.
He said: “Improving the framework for borrowing is very important because borrowing is part of the financial system, and we can only make much of the movement we want if there is enough funding. Therefore, we want to be sure of the sustainability of both government, municipal and state government indebtedness, particularly with the new Supreme Court order on the 774 local government areas that receive direct subsidy from the Federal Government.
“Therefore, it is important that we manage those resources through strategic and focused loans to help the development of those sectors.”
For corporations, the SEC Director General said the Commission is changing the landscape with the new rules on central counterparties (CCPs), adding that the new rules on CCPs have become very critical to the development of Nigeria, especially for corporations in raising capital.
“As a Commission, we have put those new rules in place and they will be operational by 2025. We want to make borrowing a smooth and effortless process for Nigerian businesses.
“It is very important that as we drive the growth of the Nigerian capital market, we also drive new products and new opportunities for all Nigerians. For a long time, Nigeria has been seen as a single-product market, but the year 2025 will be different because we will continue to drive the process of introducing derivatives into the capital market.
“That is not possible without laws and regulations that will help us do better. To build confidence in derivatives trading, we hope to provide clear direction for these transactions. To build confidence in derivatives trading, we aim to provide a clear exemption of these transactions from general insolvency laws, creating a safer and more predictable trading environment,” he said.
Agama said the Commission is creating a safer business environment, building trust and attracting more players to the market; therefore, it must provide enabling regulations and laws.
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