The British Deputy High Commissioner, Mr. Ben Llewellyn-Jones has underscored the need for the Nigerian capital market regulators and operators to create more alternative investment options for all classes of people in order to deepen domestic participation in the Nigerian capital market.
Speaking during a meeting with the Securities and Exchange Commission (SEC), Llewellyn-Jones said the diversified investment options would help to attract people to the Nigerian market and also pulled away people from unregulated space.
“The more you can create alternative options the easier it is to pull people away from unregulated space and that is why the Sandbox is so attractive to us and why we encourage it. We come across these fintech players and they are formidably driven in their vision.
“But we get a sense they need to work with regulators to make it work and they recognise that it’s the right way to be attracted to investment and grow the way they want. They are formidably talented as well and it is really encouraging. We are very keen to work with you and your approach and that’s very heartening and the appetite for innovation is what has attracted us to that the most,,” Llewellyn-Jones.
Director-General, Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, reaffirmed the commitment of the Commission to programmes aimed at making the capital market attractive to Nigerians of all ages and status.
He said the Commission is implementing various initiatives to ensure that products and offerings in the market are accessible to both the young and old which he said would further deepen the market.
“When we assumed office, we were shocked to know that the average age of the Central Securities Clearing System account holder was over 50 years. The CSCS is a depository so if you are investing in equities you must have a CSCS account.
“The average age of that account holder was over 50, and that made us realise that the young people were not participating in this market and when young people are not participating in any market, that market is doomed to fail. And young people today prefer to do things on their phones, if you have to fill a stack of forms manually young people won’t do it. We want to make investing in the capital market a fun experience.
The capital market experience starts with a bank account and eventually the distribution has to hit a bank account as well. So we decided to look at the whole process and find out what is turning young people off. We have started the process and seen how the tech companies are providing much needed relief to the kind of bureaucracy that happens in the capital market,” Yuguda said.
Yuguda disclosed that the SEC recently approved an e-offer for MTN and expressed the excitement of the Commission that Nigerians especially those of the younger age bracket were able to participate in the offer.
“It was marvellously successful and we are very excited about it. A lot of young people who had never invested in the capital market took the MTN offer. That is one of the first step in a lot of steps we are going to take to make investing in the capital market a much nicer experience for people both young and old. We know we can move quickly and faster once we strengthen our IT infrastructure to do a lot more” He said.
“In this market what we have seen is that where people do have ready access to interesting products in the regulated market they then gravitate towards the parallel markets and the Ponzi schemes and really the task of the Commission is to as much as possible move money to the regulated market away from the Ponzi schemes,” Yuguda said.
He noted that with e-offers, a lot of Nigerians would be happy to invest in the capital market and that would dissuade people from patronising illegal schemes thereby leading to the development of the capital market and the Nigerian economy.
Yuguda also said that the Commission in its drive to attract more people to the market is focusing on a proper identity management system which would also aid in the reduction of the issue of unclaimed dividends.
“One area we recognised we needed to attend to is the lack of proper identity management system in the market and this an area the Commission has really focused on. We have had over the past few decades a lot of unclaimed dividends in the market and we thought that the identity management could help solve the problem.
“I believe if we are able to do this to a logical conclusion it could unlock a lot more investors because I think the fact that people have money in the capital market and have not been able to claim them, it is not only bad for the people who have this money but it is also a disincentive for those trying to come in because they do not want their money to be trapped,” Yuguda said.