We will continue to support Fintech, others —SEC

Mr Lamido Yuguda, the Director-General of the Securities and Exchange Commission, has said that the executive management of the commission will continue to create awareness, impart knowledge and engendering public participation on issues relating to Financial Technology (Fintech), sustainable finance, financial inclusion and non-interest finance.

Yuguda said the SEC recognises the disruption of Fintech in the financial industry and aims to create an enabling regulatory environment that would ensure a balance between investor protection and technological advancement.

The DG, who spoke during an interview recently, stated that the SEC would advance efforts towards developing a comprehensive regulatory framework that ensures that operators in the digital asset space conduct their activities in a manner that protects investors and maintains financial system stability.

He stated that to develop an appropriate regulatory framework for Fintech, regulators need to understand the digital asset space to be better positioned to address identified risks.

He said, “The SEC will continue to monitor developments in the digital asset space and further engage/collaborate with all critical stakeholders, including the CBN, to create a regulatory structure that enhances economic development while promoting a safe, innovative and transparent capital market.

“We believe that Fintech would not only bring about efficiency to the capital market but would also serve as a veritable tool for advancing Nigeria’s financial inclusion agenda. However, there is a need to develop an appropriate regulatory framework to ensure the safety of innovation to investors and preserve market integrity,” he said.

According to Yuguda, the SEC’s approach is consistent with the approaches of several securities regulators around the world as in the United States of America, the US SEC requires platforms that offer to trade in digital asset securities and operate as exchanges to register or seek to be exempted from registration.

“In the United Kingdom, the Financial Conduct Authority (FCA) requires firms that carry on specified activities, by way of business, involving a crypto asset, to be authorised. Crypto assets are viewed as financial products in South Africa and the Financial Sector Conduct Authority (FSCA) requires persons carrying out associated activities to be regulated.

“In Malaysia, operators of digital asset platforms are required to be approved by the Securities Commission (SC) as recognised market operators. Several other securities regulators have taken similar positions,” he said.

The DG said that at the moment, crypto exchanges do not have access to the banking platform that is needed to drive their trades in Nigeria saying that in its drive to implement the revised 10-year capital market master plan, the commission is looking at digital assets that really protect investors.