SEC Says Banking Sector Recapitalisation Funds To Be Raised This Quarter

The Securities and Exchange Commission (SEC) has disclosed that the process of raising funds from the capital market for the purpose of banking system recapitalisation will commence this quarter.

Director-General of the SEC, Lamido A. Yuguda, while addressing journalists via webinar yesterday after the Capital Market Committee (CMC) meeting outlined a series of measures designed to ensure a smooth, efficient, and investor-centric process to the upcoming banking sector recapitalisation exercise.

According to Yuguda, “we have also been working with some market participants, trying to make sure that this process (we expect to start within this quarter) is done very smoothly and making sure that the SEC and the market and the banks avoid all the mistakes we have had with past exercises.”

The SEC boss said the Commission is committed to avoiding past pitfalls and will “very shortly issue appropriate guidelines to facilitate an efficient capital raising process.” These guidelines, he said, will prioritise speed, fairness, and good market conduct.

Yuguda stated that the SEC is fostering close collaboration with the Central Bank of Nigeria (CBN) and other relevant agencies to ensure a seamless recapitalisation process.

The SEC DG noted that protecting investors remains a core priority for the SEC. As a result, “the guidelines will emphasise the benefits of past exercises while safeguarding those who participate in upcoming capital offerings”.

The SEC, Yuguda revealed, has a strong preference for a paperless, digital recapitalisation process.

According to him, “recent successful examples in the market demonstrate the viability of this approach. A digital format would promote inclusivity, particularly for younger demographics accustomed to electronic transactions. While the last details are being finalized, the SEC’s intention to prioritize digital access is clear”.

The Director-General expressed confidence in the Nigerian capital market’s ability to support the recapitalization. He cited recent instances of large companies successfully raising significant capital, indicating the market’s depth and financing capabilities.

Yuguda also highlighted other developments within the Nigerian capital market. These include: the Non-Interest Capital Market Committee’s exploration of non-interest instruments for financing, potentially opening new avenues for asset securitisation and infrastructure projects.

Collaboration between the Committee and the Islamic Banking and Finance Institute of Malaysia to provide training and collaboration opportunities for Nigerian Islamic finance institutions.

He equally disclosed that the Lagos Commodities and Futures Exchange’s upcoming listings of Gold, Lithium, and Oil and Gas futures contracts, will expand opportunities for traders and investors in the commodities space.

The SEC has granted approval for five infrastructure fund shelf programmes totaling N1.5 trillion. This is considered a significant step forward in supporting the Federal Government’s infrastructure development goals.

Yuguda spoke about the continued growth in the Fund Management industry with approvals for new mutual funds and discretionary/non-discretionary investment products as well as the enhanced investor protection through a requirement for all Collective Investment Scheme (CIS) funds to be held in custody. This measure, he said, safeguards investor assets and promotes market stability.