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The origin of the Securities and Exchange Commission dates back to 1962, when an ad hoc consultative and advisory body, known as the Capital Issues Committee, was established under the aegis of the Central Bank of Nigeria (CBN). Its mandate was to examine applications from companies seeking to raise capital from the capital market and recommend the timing of such issues to prevent issues clustering which could overstretch the market’s capacity. The Committee operated within the Central Bank of Nigeria unofficially as a capital market consultative and advisory body with no regulatory framework. An increase in the level of economic activities, coupled with the promulgation of the Nigerian Enterprises Promotion Decree in 1972, necessitated the establishment of a body backed by law to regulate capital market activities hence the creation of the Capital Issues Commission to take over the activities of the Capital Issues Committee. The Capital Issues Commission was established with the promulgation of the Capital Issues Commission Decree in March 1973. The new body had a board of nine (9) members, including a representative of the Central Bank of Nigeria who served as Chairman, while the other eight (8) members were drawn from some Federal Ministries, the industrial and financial sectors of the economy. In order to cope with emergent challenges, the powers of the Capital Issues Commission had to be further enhanced. A Financial System Review Committee was set up by the federal government to review capital market activities and proffer ways of developing the market. The recommendations of the Financial System Review Committee in 1976, led to the establishment of the Securities and Exchange Commission following the promulgation of the Securities and Exchange Commission Decree No. 71 of 1979 to supersede the Capital Issues Commission in 1979. The Commission had more powers to regulate and develop the Nigerian capital market, in addition to determining the prices of issues and setting the basis for allotment of securities. Unlike its two predecessors, the Commission at this stage was excised from the CBN, although it continued to receive funding from the apex bank. It also had an enlarged 12-member board with a CBN representative as Chairman. Other members were drawn from the Ministries of Finance, Trade and Industries, the Nigerian Stock Exchange and the Nigerian Enterprises Promotion Board; other members were nominated on the basis of individual merit. The Commission took off effectively on January 1, 1980 with 51 staff out of which seven (7) were seconded (for a period of three years) from the Central Bank of Nigeria (CBN) while a few senior and support service staff were recruited. Nine (9) years after the establishment of the Securities and Exchange Commission, the enabling law, Decree No. 7 of 1979, was re-enacted as SEC Decree No. 29 of 1988 with additional provisions to address observed lapses in the previous arrangement and to enable the Commission pursue its functions more effectively.
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To further enhance the Commission’s pursuit of its objective of investor protection, a review of the capital market was carried out in 1996 by a seven – man panel headed by Chief Dennis Odife. Based on the panel’s recommendations, a new Act known as “The Investment and Securities Act No. 45 of 1999” was promulgated on May 26, 1999. The Act repealed the SEC Act of 1998. The new Act was expected to promote a more efficient and virile capital market, pivotal to meeting the nation’s economic and developmental aspirations. The Investment and Securities Act (ISA) was further reviewed, amended and subsequently passed into law in 2007. The SEC currently derives its powers from the ISA 29 of 2007. The Securities and Exchange Commission (SEC) joined the International Organisation of Securities Commissions (IOSCO) in June 1985. The IOSCO is a body of Securities Commissions with the goal of cooperating in developing, implementing and promoting adherence to internationally recognised and consistent standards of securities market regulation. The Nigerian SEC qualified as an Appendix ‘A’ Signatory to the IOSCO MMOU in 2006 and has continuously been benchmarking its market rules and regulations against those of IOSCO, the global international standards setter. Our culture is built on a core system of values which are pivotal to the actualization of our mission and sustenance of our vision. Together, our mission, vision and values constitute the cornerstone of our Corporate Philosophy.
To Develop and Regulate a Capital Market that is Dynamic, Fair, Transparent and Efficient, to Contribute to the Nation’s Economic Development
To be Africa’s Leading Capital Market Regulator
…towards a World-Class Market
Leadership by Example Transparency Discipline Honesty Effectiveness Commitment to Excellence Punctuality Fairness Proactiveness
In regulating the market, the Commission undertakes the following activities in order to protect investors, market operators and also ensure market integrity. Regulation is carried out through deployment of the following tools: Registration of securities and market intermediaries to ensure that only fit and proper persons / institutions are allowed to operate in the market. Instruments and persons registered in the market are: Securities/Commodity Exchanges/Capital Trade Points Futures, Options and Derivatives Exchanges Depository, Clearing and Settlement agencies Capital Market Operators: Issuing Houses Securities dealers/Stock brokers/Sub- brokers Registrars/Transfer agents Trustees Reporting Accountants Solicitors Investment Advisers etc. Securities: Equities Debentures Debt instruments Collective investment schemes Inspection either done “onsite” or “off-site”. The Commission, at regular intervals, calls for information from capital market operators. It also undertakes and conducts inquiries and audits of any participant in the market whenever necessary. Surveillance is carried out over exchanges and trading systems to forestall breaches of market rules as well as deter and detect manipulations and trading practices which are capable of causing market disruption. Investigation of alleged breaches of the laws and regulations governing the capital market and enforcement of sanctions where appropriate. Enforcement actions are taken against market operators who are found wanting after investigation is carried out, in minor cases, an all parties meeting is convened by the Commission where it mediates between parties involved in a dispute. However, if the case is serious or where no resolution is reached or a party fails to comply with a directive given at the all parties meeting, the defaulting party will be called before the Administrative Proceedings Committee (APC), which is a quasi judicial court, with only civil jurisdiction. Appeals against decisions of the APC are usually made at the Investment and Securities Tribunal (IST). Enforcement action may be in the form of payment of fine, ban, suspension or even forwarding the case to the Nigeria Police Force (NPF), Economic and Financial Crimes Commission (EFCC) or the Attorney – General of the Federation (AGF) where allegations are found to be criminal in nature. Rule making by the Commission as developments occur. This is to ensure that the Commission meets up with international best practices.
In the area of market development, the Commission collaborates with relevant stakeholders to introduce new products and processes. The SEC encourages improved investor participation in the market through any or a combination of the following activities: Workshops and seminars Town hall meetings Television/Radio programmes Introduction of e-processes e.g. e-dividend, e- allotment, etc Secondary school quiz and essay competitions Introduction of capital market studies in tertiary institutions Publications (i.e. Journals, bulletins and cartoons)
Our activities are currently governed by the Investments and Securities Act 29 of 2007. The Commission is led by a Nine-member Board. A Four-member Management Executive Committee consisting of the Director-General and three Executive Commissioners (in charge of Operations, Corporate Services, and Legal & Enforcement) superintend the day-to-day activities of the Commission. Currently, the workforce is over 500 staff-members spread across Four Directorates, Three Zonal Offices and the following Departments: Securities and Investment Services (SIS): Registers and supervises the issuance of securities of public companies, as well as merger and acquisition activities. Reports to the Executive Commissioner, Operations. Registration and Exchanges (R&E): Responsible for the registration of all market operators and recognized securities exchanges. In addition, the department supervises the activities of the securities exchanges and other trading platforms. Reports to the Executive Commissioner, Operations. Investment Management (IM): Supervises unit trusts and venture capital activities, and reports to the Executive Commissioner, Operations. Financial Standard and Corporate Governance (FS&CG): The department reviews the financial health of publicly quoted companies to protect shareholders, and ensure compliance with the code of corporate governance and other relevant guidelines. Reports to the Executive Commissioner, Operations. Office of the Chief Economist (OCE): Undertakes the market development functions of the Commission through research and other development activities. The Department also serves as the Secretariat of both the monthly Management Committee meeting and the Capital Market Committee (CMC), a quarterly interface with the market. Reports to the Executive Commissioner, Operations. Zonal Offices Coordinating (ZOC): Coordinates the activities of the Commission’s seven zonal offices located in Lagos (LZO), Port- Harcourt (PHZO), and Kano (KZO). Reports to the Executive Commissioner, Operations. Information Technology (IT): Develops and manages the IT resources of the Commission and provides requisite technical services functions. Reports to the Executive Commissioner, Operations. Enforcement: Undertakes the enforcement and compliance functions of the Commission and serves as the secretariat of the quasi judicial arm of the Commission, the Administrative Proceedings Committee. Reports to the Executive Commissioner, Legal and Enforcement. Monitoring: Monitors the financial health of market operators to ensure that only fit and proper participants are in the market. It also investigates and resolves disputes among market stakeholders. Reports to the Executive Commissioner, Legal and Enforcement. Legal: Provides legal advisory and rule making functions. Reports to the Executive Commissioner, Legal and Enforcement. Procurement & Support Services (P&SS): A service department responsible for the management of the Commission’s material assets. Reports to the Executive Commissioner, Finance and Administration. Finance & Accounts (F&A): Another service department. Manages the financial assets, activities and records of the Commission. Reports to the Executive Commissioner, Finance and Administration. Human Resource Management (HRM): Also a service department. Responsible for the recruitment, development and retention of highly skilled staff. Reports to the Executive Commissioner, Finance and Administration. External Relations (ER): The department is responsible for the management of the Commission’s image as well as its relationship with the various stakeholders in the market. It collaborates with the Media Unit of the DG’s office to manage the nature and flow of information about the Commission. Reports to the Director General. Office of the Secretary to the Commission: Serves as the Secretariat of the Board of the Commission, its Committees and the Management Executive Committee. It offers advisory services to the Board on issues of compliance with applicable laws and regulations. Reports to the Director General. Internal Control (IC): A department responsible for ensuring that the assets of the Commission are effectively applied. It also ensures compliance with approved policies, procedures and regulations and the completeness, accuracy and reliability of the Commission’s financial records. Reports to the Director General. Market Development: The Market Development Department (MDD) derives its functions from section 13(e) (f) (i) (j) of the ISA No. 29 of 2007. It ensures that all stakeholders – investors, academic community, market operators, law makers, professional bodies, government functionaries – are appropriately educated on the activities and initiatives of the Commission. To achieve the above objectives the Department is currently made up of Four (4) Divisions namely: Investor Education, Non-Interest Finance, New Products and Market Infrastructure. The Board determines the policy of the Commission whilst the Director General in turn oversees the day-today administration of the Commission. The Commission has its Headquarters at the Federal Capital Territory, Abuja and operates through its Three (3) Zonal Offices located in Lagos, Kano and PortHarcourt The Commission continuously initiates measures which reflect the dynamic nature of the financial services sector. As a result, research aimed at understudying new products or new approaches, with an increasing focus on cohesive monitoring of major activities is conducted. Enlightenment programmes spread across Nigeria, aimed at sensitizing the general public to the operations of the capital market are also regularly held in all parts of Nigeria. The presence of the SEC Offices in the Six Geopolitical Zones of the Country has added fillip to such effort. Literature such as pamphlets and books on various aspects of the capital market are published and circulated by the Commission.
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