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From Ndubuisi Orji, Abuja
Security and Exchange Commission, (SEC) the Chartered Institute of Stock Brokers, as well as other critical stakeholders in the Nigerian capital market have expressed support for a bill before the House of Representatives, seeking to prohibit Ponzi schemes in the country.
The stakeholders expressed support for the proposed legislation, which prescribes 10year jail term for operators and promoters of Ponzi Scheme, at a public hearing on the organize by the House Committee on Capital Market and Institutions, on Tuesday, in Abuja.
The proposed legislation has as its long title “a bill for an act to repeal the investment and security act, 2007 and enact the investments and securities bill to establish securities and exchange commission as the apex regulatory authority for the Nigerian capital market as well as regulation of the market to ensure capital formation, the protection of investors, maintain fair, efficient and transparent market and reduction of systematic risk and for related matters”.
The Director General, SEC, Lamido Yuguda, while speaking at the public hearing, lauded the House for coming up with an amendment to the Investment and Security Act( ISA), stating that it will help to remove ambiguity.
Yuguda noted that the Commission observed areas in the existing act that needed to be reviewed, so as to enhance the competitiveness of the Nigerian capital market at the international scene.
According to him, “given the market’s evolution since the passage of the ISA 2007, it was the consensus of the major stakeholders in the capital market community that a complete overhaul of the ISA through a new Bill is necessary in order to achieve the objective of consolidating the efficiency, transparency and viability of the market.
“It is also noteworthy that the Nigerian Capital Market Masterplan (2015-2025), which was launched by the Commission in 2014, strongly recommends the holistic strengthening of the Legal and Regulatory Framework underpinning capital market operations.
“The Bill expands the definition of a Collective Investment Scheme to include schemes offered privately to qualified investors. Minor reviews on various Sections of the extant law have been carried to provide greater clarity.
Importantly, the Bill introduces an express prohibition of Ponzi/Pyramid Schemes as well as other illegal investment schemes. The Bill also prescribes a jail term of not less than 10 years for promoters of such schemes”.
Other who spoke at public hearing included the President of the Chartered Institute of Stock Brokers, Olawale Adeosun, Issuing Houses of Nigeria, Association of Security Dealers amongst others.
Earlier, the speaker, Femi Gbajabiamila, while declaring the hearing open, said there is need to boost there investor’s confidence in the capital market.
Gbajabiamila, who was represented by
the deputy House leader, Peter Akpatason, said with the country cannot allow we cannot afford allow deficiencies in the system that will make investors to worry about the safety of their investments.
“The need to ensure that the operations of the capital markets and the entire industry sector are sufficiently fair and transparent to ensure investor confidence is of particular concern. It is often said that capital is cowardly and will run at the slightest risk.
“In this new global economy, when investors have the option to quickly move money across industries, nations and continents, we cannot allow deficiencies in the system that cause investors to worry about the safety of their investments”, he stated.
