In a major boost to the operations of the Securities and Exchange Commission (SEC) and the Nigerian capital market, the Senate of the Federal Republic of Nigeria has passed the Investments and Securities Bill 2024.
The Investments and Securities Bill, meant to repeal the Securities and Exchange Commission (SEC) Act, scaled second reading on the floor of the Senate Wednesday.
During the consideration of the report on the Bill from the committee on Capital Market, Senate Chief Whip, Tahir Monguno stated that it will protect investors and eliminate fraudulent dealings in the capital market.
Leading the debate, chairman of the Senate Committee on Capital Market, Osita Izunaso said the bill sought to repeal the Investments and Securities Act, of 2007 and enact the Investments and Securities Act, 2024, stating that the ISB is capable of transforming the capital market, encourage the influx of foreign investors as well as boost investors’ confidence, among others.
Izunaso said, “the Bill seeks to repeal the existing Investments and Securities Act 2007, and to establish a new market infrastructure and wide-ranging system of regulation of investments and securities businesses in Nigeria especially in the areas of derivatives, systematic risk management, financial market infrastructure and Ponzi scheme and platforms.
He further said the main objective of the bill was to enact legislation that aligned with global dynamics as they relate to the regulation of the capital market through the provision of an innovative regulatory framework.
He said that the overriding purpose of the proposed legislation was to strengthen the capacity of the Commission for the effective performance of its statutory mandate as well as reposition that vital sector of the economy for national economic transformation.
The bill was also supported by Sen. Isa Jibrin and Sen. Adetokunbo Abiru. According to Jibrin, we have been having problems in terms of definite assignments that the Securities and Exchange Commission (SEC) is supposed to carry to ensure that the Nigerian Capital Market functions effectively. This amendment is very important to ensure that the SEC does its job in line with the global best practice.
While announcing the passage of the Bill, President of the Senate, Godswill Akpabio said “a lot of people would be happy to infuse funds into the capital market when they know a lot of the risk has been minimised.”
He referred the bill to the Senate Committee on Capital Market for further legislative actions.
Speaking recently, director-general of SEC, Dr. Emomotimi Agama said the Bill is pushing for harsher penalties on Ponzi scheme operators through the proposed Investments and Securities Bill (ISB) 2024, which mandates a minimum fine of N20 million or up to 10 years in prison, or both.
Agama explained that the bill explicitly prohibits Ponzi and pyramid schemes, fortifying protections for investors against illegal fund managers, adding that it aims to shield Nigerian investors from fraudulent schemes and enhance the capital market’s global competitiveness.
A notable amendment in the Bill would allow the Investor Protection Fund (IPF), established by securities exchanges, to cover investor losses linked to the deregistration of brokerage firms, extending beyond the current coverage of bankruptcy or negligence cases.
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