The Securities and Exchange Commission has said that it will deploy the full weight of the law against individuals and entities that engage in activities that are contrary to laid down regulations in the capital market.
Director general of SEC, Emomotimi Agama said the commission is committed to protecting investors including those in the crypto space and therefore enjoined participants in the market to play by the rules.
According to Agama, “We are certainly going to commence enforcement actions on anyone who wants to operate in this market and does not have the intention of being regulated. This also applies to those in the crypto space. We are sending this signal to all those that want to play by the books that they are welcome to our space. But for those that do not want to play by the books, of course we definitely will not allow them to operate within our space”.
The DG disclosed that the commission decided to take the recent step of issuing Approval-in-Principle to two crypto exchanges because it observed thatNigerian youths were becoming increasingly interested in the digital space and so it was important to provide regulation, clarity and indeed the protection of investors which is its primary responsibility.
“All this we seek to do without hindering innovation because part of our primary responsibility as the SEC is market development and we are aware that Mr. President is very interested in youths and the activities of youths. Clearly, the majority of persons involved in this space are the youths therefore, it is no gainsaying that providing a regulated space for these individuals is a primary responsibility of the SEC. So we had to provide a guide, clarity and the knowledge it requires to put all of these things in place and that is why we have done what we did.
“It is important to understand that being the apex regulator of the capital market, we follow international guidelines and one of which is about disclosure.
Full disclosure and making sure that they meet the Anti-Money Laundering and Combating the Financing of Terrorism reports and making sure that disclosures are made to investors and also education is important as well as a guided regulatory space” he stated.
The SEC boss said the Commission is taking various steps to ensure that the Nigerian population is safeguarded from any attempt to misinform them and fleece them of their hard earned resources adding that the activities of crypto exchanges must be watched closely so that they do not impede the national economy.
“It is our responsibility to ensure that whoever is operating in our environment must follow the rules and must not do anything that will cause harm to our economy. It is imperative that we bring clarity and understanding to the entire system and ensure everybody works by the books as provided” he stated.
He disclosed that Securities regulation is a knowledge based phenomenon, saying that one of the things the SEC is doing is to ensure it provides the best of education to its staff that are going to be busy doing the job.
“Training is important, education is important, exposure is important and of course a sense of responsibility is also important. We see this as a national task and speak to the mind-set of the young Nigerians and see it as a responsibility to guide against unscrupulous elements who want to destroy our economy. For various reasons it is important that we are here to do what we have been asked to do and we will do our best to make sure that we operationalise what we are doing in line with global standards.
“As I speak, the International Organisation of Securities Commissions, IOSCO is organising a training programme for crypto regulations in Spain and the staff of the Commission will be represented there. We are also part of global discussions around regulation of crypto, regulation of digital assets and all forms of fintech that are associated with securities regulation” Agama stated.
He said the Commission does not intend to flood the market with exchanges but will be guided by the qualifications and filings of these individuals saying, “We have a deluge of intending applicants into the system but we do not flood the market with exchanges. The number we are going to register in the future is dependent on the individuals and companies meeting the strict regulatory requirement that we have set in place in order to bring sanity into the market.
Agama disclosed that the SEC has a Regulatory Incubation Programme which speaks to initial applicants in the system, examines what they do, evaluates them to ensure they are fit and proper after which they are transferred to the Accelerated Incubation Programme which is for those that have crossed through.
“It allows us to evaluate risk management, fit and proper test, disclosure requirements, good market structure and an understanding of what they intend to achieve. We put them in a controlled environment that enables the SEC to watch over what they are doing so that we are able to prescribe specifically regulations that are fit for purpose and would help in protection of would be investors” he added.
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