The Securities and Exchange Commission (SEC) was in a turmoil of sort when Ms Mary Uduk was appointed the acting Director General on April 13, 2018 following the removal of two DGs in under six months.
One of the hallmarks of a good regulatory environment is stability in the leadership of the regulator. In this case, stability at SEC, the regulator of a critical sector of Nigeria’s economy is very important in boosting the confidence of investors, both local and international.
Two years after that appointment was made, there has been clear and tangible transformation in both how the Commission now operates and the stability in the Capital Market environment.
Even with the negative impact of the novel Coronavirus pandemic, the Capital Market has continued its slow but steady recovery in value to the surprise of many. This is mainly attributable to prompt and proactive measures put in place by the Uduk led SEC in ensuring that rules guiding automated trading were out early and clearly spelt out.
One of her first initiatives was to make the implementation of the Capital Market Master Plan a priority.
The ten-year (2015 to 2025) Capital Market Master Plan was launched by SEC in 2014 with the objective of positioning the capital market for an accelerated development of the national economy.
The Plan was built around four strategic themes namely: i) To drive and facilitate capital raising for sustainable national development and transformation of Nigeria’s priority economic sectors, thereby effectively contributing to the national economy; ii) To align market structure to requirements of the economy as well as increase scale, size and professionalism of all stakeholders; iii) To ensure competitiveness by establishing practices to improve transparency, efficiency and liquidity and to attract sustainable interest in the capital market from domestic as well as foreign investors and participants; iv. To create an enabling and facilitative oversight and regulatory framework supportive of the deepening and development of the Nigerian capital market.
With over 100 initiatives, the Plan has the potential to facilitate the implementation of the Nation’s economic agenda. In implementing the plan and other policy initiatives, the Nigerian capital market has been contributing its quota towards the growth and development of the country.
For instance, with the dematerialization process completed, investors no longer need to worry about the loss or damage to their physical share certificates as they are now electronically stored.
One of the policies Uduk has pushed for is the e-dividend payment system which allows shareholders’ dividend to be paid directly into their bank account without the stress of dealing with physical dividend warrants.
This has in no small measure ensured that investors who have put a lot of their resources into buying quoted companies shares get paid their dividends directly and promptly too.
Also, the Direct Cash Settlement protects investors from funds mismanagement by ensuring that the proceeds from sales of their shares are credited directly into their own account, as against that of the stockbroker.
Perhaps, Uduk’s best legacy would be in the area of encouraging commodity trading and this because a lot is expected from the sub-sector if Nigeria’s hope of diversifying its economy and government revenue sources away from oil is to be achieved.
The commission through the Commodities Trading Implementation Committee, has been engaging with the Standards Organizations of Nigeria to publicize the relevant standards issued for Agricultural products.
In October 2019, the Commission organised a roundtable and an International Commodity Conference in March 2020, bringing together various domestic and international stakeholders on commodities to discuss and collaborate on areas that will showcase and unlock Nigeria’s potentials in the commodities space.
A vibrant commodity ecosystem would ensure that many of the country’s challenges in food security, raw materials availability, exports earnings, industrialisation, job creation and risk exposure can be reasonably addressed.
This is why there is so much hope in this system which would hopefully bring back Nigeria’s glory days in agricultural productions.
Closely related to the development in the commodities space is the need to grow Nigeria’s financial derivatives market which is a necessary product that can help in risk management, portfolio diversification, market depth and liquidity.
The release of Rules on Sukuk bonds has enhanced the issuance process and fostered participation in the instrument. Osun State issued a Sukuk Bond to finance building of schools while the Federal Government used two series of Sukuk Issuances to finance the building of roads and other infrastructure.
To further support infrastructure financing, especially projects with positive environmental impact, the SEC released the rules on Green Bonds in December, 2018. Green Bonds are debt instrument issued to finance or refinance projects that have positive environmental impact.
So far, the Federal Government has issued two green bonds to finance afforestation, renewable energy, provision of clean energy and other climate change initiatives while two private companies have issued this instrument to finance eligible green assets and projects.
In the past two years. the SEC, along with the market, has championed the introduction of Capital Market Studies into curriculum of basic and senior secondary schools in Nigeria, while further plans are ahead to do same for higher institutions.
Even, as she begins to wind down her time at the helm of the regulatory institution, many would look fondly at the several innovative ideas she has brought to bear in the management of the Commission and in regulating the market that have ensured over 24 months of stability and growth in the sector.
Ms Uduk, a career long, thorough bred SEC technocrat, joined the commission in 1986 as an Assistant Analyst. Her career in the SEC has spanned many functions and departments. From corporate finance, to administration, to providing structural, policy and due diligence for capital market transactions.