Regulation, key to digital technology approach in Capital Market development

AS much as digital technology is expedient for the growth of the capital market, disruptions could threaten investors’ confidence in the market if digital technology is left unregulated.

At the 10th annual conference of the Institute of Capital Market Registrar’s (ICMR) with the theme ‘Reinventing the Nigerian Capital Market for Growth: The Digital Technology Approach, on Saturday, the importance of regulation was emphasized in order to grow the capital market.

Giving his keynote address, the Director-General of the Securities and Exchange Commission (SEC), Dr Lamido Yuguda, said the Commission had recognized that if the application of digital technology to financial market practices are not properly regulated, it could lead to outcomes that would threaten investor confidence in the market, noting that in consistence with the position of IOSCO, the Commission has been sensitive to the regulatory challenges of a changing technological environment and has sought to balance the benefits of encouraging innovation and the use of new technologies against the need to protect investors and maintain orderly markets.

Yuguda, while noting that the Commission’s priorities are to ensure investor trust and confidence as well as fair, orderly, transparent, and efficient markets, said the Commission had issued rules to regulate several technology-driven activities in the capital market such as crowdfunding, robo-advisory and digital sub-broking.

“To actualize this, we have adopted a three-pronged approach to regulating digital innovation, which is safety, market deepening and provision of solutions to problems,” he said.

Yuguda, however, assured that SEC would continue to ensure that intermediaries harness digital technology in such a way to better serve the needs of investors in all aspects of the capital market and also continue to engage with all stakeholders on new developments in the digital technology space.

“I believe that we all have a common interest in seeing these opportunities harvested, but also in mitigating the risks so that we all can reap the benefits,” he said.

Earlier while in his welcome address, the President/ Chairman of Council, ICMR, Mr Seyi Owuturo, said the Institute believed that the deliberation was auspicious at a time when the Covid-19 crisis had brought digital transformation in the way companies in all sectors and regions do business.

Mr Owoturo thus said the Institute expect a digital technology approach to drive positive outcome in streamlining process, harnessing data and shaping entirely new ways of doing business.

Speaking on exploring digital innovations to solve the issue of unclaimed dividends in the country, Mr John Obaro, Managing Director/Chief Executive Officer of SystemSpecs Limited technology could be used to open up new ways of operations, drive productivity, increase collaboration and partnership, among others.

Obaro said to bring a lasting solution to the unclaimed dividend conundrum, legislation and guidelines should be looked into, as current laws cannot motivate the industry players to aggressively seek a resolution.

He added that laws should be enacted and guidelines issued that moves the customer to the centre of the benefits of investments, while also noting that there should be the automation of a properly integrated system.

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