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The Director General of the Securities and Exchange Commission (SEC), Emomotimi Agama, has called on capital market operators to embrace innovation as a key driver for sustainable growth, efficiency, transparency, and resilience within the capital market.
Speaking at the 2024 Capital Market Solicitors Association Annual Business Summit in Lagos, themed “Revolutionising the Nigerian Capital Market through Innovative Financial Instruments for Sustainable Development,” Agama emphasized the importance of innovation in the sector.
He highlighted the SEC’s proactive stance in adapting regulations to accommodate emerging financial products and services driven by technology. This approach aims to create a robust and reliable capital market ecosystem while supporting technological advancements.
“In our efforts to support innovation and growth in the market, the SEC has established a program of assessment called Regulatory Incubation to help new fintech businesses. This programme allows them to operate for one year within a highly regulated and limited perimeter while the SEC develops applicable rules to address these innovative technologies,” Agama stated.
He explained that the incubation programme ensures investor protection and market stability while fostering financial technology advancements in the Nigerian capital market. The initiative is central to the SEC’s strategy, as outlined in the Revised Capital Market Master Plan (CMMP 2021-2025), which aims to leverage technology and innovation to expand the depth and breadth of the Nigerian capital market.
Agama also warned stakeholders about the associated risks such as cybersecurity threats, regulatory complexities, and market volatility. He stressed the importance of balancing the exploration of new instruments with robust risk management frameworks.
“While the potential of innovation is undeniable, embracing it also comes with challenges. Therefore, we must ensure that the exploration of new instruments is balanced with robust risk management frameworks. The SEC will ensure appropriate safeguards are in place to protect investors and maintain market stability,” Agama noted.
He emphasized the necessity of maintaining investor confidence through transparency and clear communication, which remains a priority for the SEC to sustain market stability amidst technological advancements.
Agama commended the collaboration among stakeholders at the Summit, highlighting the need for continuous dialogue and improvement. “The success of these initiatives demands collaboration by all stakeholders, including the CMSA, legal professionals, regulators, and market participants. We must create a forum for open dialogue and continuous improvement.”
SEC’s regulatory incubation programme for fintechs was initiated to ensure the safety of investors and their investments in the capital market
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