SEC moves to improve rules for borrowing by governments, corporations
By Seun Ibiyemi
The Securities and Exchange Commission (SEC) has announced plans to enhance the rules and regulations surrounding borrowing for both government and businesses.
In a statement from the SEC, the Director-General of the SEC, Dr. Emomotimi Agama noted the importance of ensuring that borrowing practices are sustainable for various levels of government, including local and state authorities.
His comments come in light of a recent Supreme Court order that allows the 774 local government areas to receive direct financial support from the Federal Government.
Dr. Agama explained: “It is crucial that we manage these resources wisely through strategic borrowing, which will promote development in these sectors.”
“For businesses, Dr. Agama disclosed that new regulations concerning Central Counterparties (CCPs), which are intermediaries that help facilitate and manage trading between companies, are expected to come into effect in 2025 and are designed to make the borrowing process smoother for Nigerian companies looking to raise capital.”
He stated, “We want to make borrowing an easy and trouble-free experience for Nigerian businesses.”
Historically, Nigeria’s economy has been viewed as reliant on a narrow range of products, but Dr. Agama believes that significant changes will be introduced by 2025.
He revealed the introduction of derivatives financial contracts whose value is linked to the future price of an asset which will diversify the capital market.
“To encourage this growth, the SEC is working on creating laws and regulations that will provide a clear and safe trading environment for derivatives, including protecting these transactions from general insolvency laws.”
Dr. Agama noted that building trust in derivatives trading is key to attracting more investors to the market.
“The SEC is focused on creating a safer and more reliable trading atmosphere, which is expected to increase participation and investment in Nigeria’s financial market.
“By enhancing regulations and introducing new financial products, the SEC aims to foster economic growth and build confidence among businesses and investors across the country,” he said.
