Efforts by the Securities and Exchange Commission (SEC), to address liquidity constraints in the capital market heightened yesterday, as the Commission unveiled plans to seal agreement with the Central Bank of Nigeria (CBN), for a dual- licence model to enable Capital Market Operators (CMO) access the CBN window. Besides, SEC said it was perfecting arrangements that would enable listed firms save up to N1billion through a pilot scheme that would enhance electronic dispatch of annual reports to shareholders.
The Director-General, SEC, Mounir Gwarzo, Gwarzo, while addressing journalists at the second quarter (Q2) Capital Market Committee (CMC) meeting in Lagos yesterday, said the dual licence will enable operators have a licence in accessing the CBN discount window for funds to eliminate the challenges of lack of liquidity faced by CMOs.
The Commission explained that it is currently discussing with the apex bank on the type of securities that operators need to put forward to fast track the process.
“Our discussion with the CBN is yielding positive and we commend the central bank for their commitment and dedication to the project. CBN is very interested in the initiative.”
He pointed out that the continued interventions by the CBN in the foreign exchange market, and the introduction of the Investors’ and Exporters’ Window (I&E) have impacted positively on the stock market performance. This is in terms of the listed firms ability to obtain foreign exchange for importation of inputs, which has ultimately improved their profitability
Concerning the annual reports, Gwarzo said quoted companies would save between N500million and N1billion from printing and dispatch of hard copies of annual reports to shareholders with the new electronic circulation initiative.
According to him, CMC had reviewed the issue in line with the macro economic challenges and decided to float a pilot scheme for electronic distribution of annual reports to save cost and ensure enhanced dividend payment in the market.