The Securities and Exchange Commission (SEC) has recently announced its intention to enhance its regulatory framework for borrowing by government entities and corporate organizations.
Eko Hot Blog reports that SEC Director General Emomotimi Agama, emphasized the importance of borrowing as a vital component of the financial system and a driver of economic growth.
Agama’s statement comes in the wake of the Supreme Court’s recent ruling on direct federal allocations to Nigeria’s 774 local government areas.
The ruling has brought attention to the need for strategic management of resources, and the SEC’s commitment to strengthening its regulatory framework demonstrates a proactive approach to addressing potential challenges.
Agama stated, “Improving the framework for borrowing is very important because borrowing is part of the financial system, and we can only make much of the move we want to make if there is enough funding.
Hence, we want to ensure sustainability in both government borrowing, especially for municipal and state governments, given the new Supreme Court order regarding local government allocations.”
He further stressed the importance of structured borrowing in supporting development across sectors.
For corporate organizations, the SEC DG noted that the Commission is revolutionizing the landscape with the introduction of new rules on Central Counter Parties (CCPs).
“As a Commission, we have established those new rules, and they will become operational in 2025. Our aim is to make borrowing a seamless and effortless process for Nigerian companies,” he said.
Agama added that SEC was also committed to diversifying the Nigerian capital market, which had long been dominated by a mono-product focus.
He disclosed plans to introduce derivatives trading in 2025, supported by enabling laws and regulations to foster growth and confidence.
“To build confidence in derivatives trading, we aim to provide clear exemptions for these transactions from general insolvency laws, creating a safer and more predictable trading environment.
By doing this, we hope to attract more players and provide new opportunities for every Nigerian,” Agama concluded.
The SEC reiterated its commitment to creating a safer and more robust trading environment to strengthen the Nigerian capital market and support sustainable economic development.
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