SEC explores blockchain technology to enhance trust, transparency in capital market
The Securities and Exchange Commission (SEC) has announced its exploration of blockchain technology to bolster trust and transparency within Nigeria’s capital market.
Dr Emomotimi Agama, the SEC Director-General, made this known during his address at the annual conference of the Capital Market Correspondents Association of Nigeria in Lagos on Saturday. Dr Agama was represented at the event by John Achile, the Divisional Head of Legal and Enforcement at the Lagos Zone Office.
Speaking on the theme “Banks Recapitalisation: Bridging the Gap Between Investors and Issues in the Nigerian Capital Market,” Achile explained that blockchain technology would play a key role in ensuring trust within the capital market. According to Investopedia, blockchain is a decentralised digital ledger that securely stores records across a network of computers in a transparent, immutable manner, resistant to tampering.
Achile remarked, “Harnessing innovation for inclusive growth is vital to bridging the gap between issuers and investors. Digital platforms have enhanced market accessibility, enabling retail investors, even in remote areas, to take part in recapitalisation exercises.”
He added, “The SEC is exploring the integration of blockchain technology for secure and transparent transaction processing, a step that will redefine trust in the market.”
The SEC official also shared that the oversubscription of many recapitalisation offers in 2024 indicated strong investor confidence. To maintain this momentum, the SEC has intensified efforts to enhance disclosure standards and corporate governance practices. Achile also highlighted the SEC’s efforts to expand financial literacy campaigns and collaborate with fintech companies to provide low-entry investment options, thus broadening access to the capital market.
“The SEC remains committed to creating an enabling environment for seamless and transparent capital formation. Our efforts include providing issuers with clear guidelines, maintaining open communication with all market stakeholders, reducing bureaucratic bottlenecks through digitalisation, ensuring the timely review and approval of applications, and enhancing regulatory oversight to protect investors while promoting market integrity,” he said.
Achile stressed that technology could address many of the challenges in the market, including deepening financial inclusion and improving market liquidity. He also mentioned the development of innovative financial products, such as green bonds and sukuk, to attract diverse investor segments, noting that the success of recapitalisation efforts depends on collaboration among regulators, issuers, and investors.
