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NASD: SEC insists on zero tolerance for market infractions

By on July 4, 2013

THE Securities and Exchange Commission (SEC) has affirmed its commitment on zero tolerance for market infractions as it tasked the newly launched National Association of Securities Dealers (NASD) Over-the-Counter (OTC) market to avoid insider dealings and other malpractices in its operations.

The Commission also stated its commitment for whistle blowing mechanism in the Nigerian capital market as a way of checkmating abuses by both operators and regulators.

The NASD OTC market is a technologically driven financial market platform where instrument, such as shares, bonds and commercial papers that are not listed on the Nigerian Stock Exchange (NSE) can now be bought and traded by stakeholders.

Speaking at the launch of the newly inaugurated OTC market platform formed by the NASD Plc, Chairman of SEC, Dr. Suleyman Ndanusa, charged promoters of the NASD OTC to take integrity as their watchdog and avoid anything that will bring distrust and mar the market, stressing that “The Commission is committed to zero tolerance and will name and shame any operator found undermining the rules of the market.”

In his words, “I am delighted to be part of the epoch making event in the Nigerian capital market that will help in transforming the market and the economy generally. Global focus after the recent economic melt-down has now shifted to the management of risks, corporate governance and stronger oversight of institutions and markets, transparency and liquidity in the various markets.

“The International Organisation for Securities Commissions (IOSCO) has been very consistent that regulators should adopt and emphasize more of risk-based supervision as opposed to the traditional method of supervising markets.

The G20 countries with advanced OTC markets that thrive more on derivatives are re-affirming their commitment to managing the manner of trading and associated risks more effectively and efficiently. The European Union has also introduced changes to its derivative market that institutionalise more transparency and liquidity in order to achieve a more robust and effective risk management.

It is expected that such reforms could impact on volumes of business traded on OTCs, product offerings, pricing, market liquidity and even the type of trade venues. The launch today, though long- awaited, is a step in the right direction. For all of us present here, I say congratulations.”

On his part, Chairman of NASD Plc, Mr. Olutola  Mobolurin, commended the SEC for inspiring the OTC market, saying, “ Indeed it is fitting that this project is coming to fruition during the tenure of  Dr. Ndanusa as chairman of SEC, one of the past Director Generals of SEC that enthusiastically supported this project and elevated the monitoring of progress. I commend the current Director General, Arunma Oteh and her team for the support and the approval in principle given when the capital requirement has not been met.”

Continuing, he said, “To the shareholders of the companies that meet the requirements for trading on the NASD, we can say that from today, you no longer have to trade blindly without knowing the true market value of the shares you are selling or buying; you no longer have to be subjected to manipulations of unregistered brokers or dealers, and you no longer have to be at the mercy of insiders.  From today, you should feel free to use the market and never hesitate to report any abuse you notice in the market, either as insiders or as operators.”

In her remark, the Director General, SEC, Arunma Oteh commended the Board of Directors of NASD, saying this is history making for not only the market, but also the entire nation. “NASD will create assets for wealth creation and this is one of the avenues to meeting the $ I trillion market target. I am glad for the actualisation of this project and hope that the operators will not undermine integrity and transparency.

In his remark, Chief Executive Officer, NSE, Mr. Oscar Onyema, said that the exchange believes in NASD and that is why it invested in it.