The Securities and Exchange Commission (SEC) has expressed its readiness to improve the regulatory framework on borrowing by governments and corporations.
Director General of the Commission, Dr Emomotimi Agama, who disclosed this in a chat, said this has become important given the critical role 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 move we want to make if there is enough funding. Hence, we want to be sure of sustainability in both government borrowing, municipal and state governments, particularly with the new Supreme Court order regarding the 774 local government areas receiving direct subvention from the Federal Government.
“It, therefore, becomes important that we manage such resources via strategic and focused borrowing to help developments in those sectors.”
For corporations, the SEC DG said the Commission is changing the landscape with the new rules on central counter parties (CCPs), adding that the new rules on CCPs have become so critical for Nigeria’s development, especially for corporations in raising capital.
“As a Commission, we have established those new rules, and they are going to be functional in 2025. We want to make borrowing a seamless and effortless process for Nigerian companies.
“It is very important that as we drive the growth of the Nigerian capital market, we also drive new products and new opportunities for every Nigerian. Nigeria for a long time has been seen as a mono-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 the laws and regulations that will help us do this better. To build confidence in derivatives trading, we hope to provide a 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 stated.
Agama said the Commission is creating a safer trading environment, building confidence, and attracting more players to the market; hence, it must provide enabling regulations and laws.
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