The Securities and Exchange Commission (SEC) on Friday said the transition of FMDQ Securities Exchange Plc to a full exchange would deepen the nation’s capital market and make it more competitive.
Ms. Mary Uduk, SEC’s Acting Director-General, stated this at the second quarter Post Capital Market Committee (CMC) news briefing in Lagos.
Speaking on the implications of the new exchange, Uduk said the emergence of FMDQ as a second exchange in the country would bring about competition in the nation’s capital market.
“What other implication will it bring other than competition; competition is good for any environment. It will help strengthen the market, it will help people to sit up and give people choice of exchanges. If you cannot do it in this exchange, you can go to the other exchange and we are expecting that others will come up as well,” Uduk said.
She noted that competition would bring down costs and as well improve efficiency in the market.
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Uduk said the transition of FMDQ to a full exchange would position the Nigerian market in line with international practices and standards where two exchanges exist.
On the plans by state governments to access the market for capital, she said the commission had not received any application from any state government. She said that the commission would welcome any state government to raise bonds for developmental projects from the market.
“It will be good for transparency because it will help their financial obligations. For you to be able to access the capital market, you must have transparent accounts as well as governance,” she said.
Uduk noted that any state government approaching the capital market to raise bond must comply with the commission’s rules before their applications would scale through.
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“One fundamental issue we look at is that we look at is total debt of a state including the proposed debt compared with revenue,” she stated.
According to her, proposed debt will not be more than 50 per cent of the preceding revenue to avoid over borrowing.
Commenting on the commission’s annual reports that have been pending for four years, Uduk said the outstanding accounts had been signed and would be in the public domain by next week.
“In the last four years, accounts of SEC were not signed because of lack of a Board. As we speak, the accounts have all been signed and they will be on our website before the end of next week,” she said.
She added that the commission carried out enforcement action against Dantata Success and Profitable Company, an illegal investment scheme operating in Kano State within the quarter.