The Director General of the Securities and Exchange Commission, Emomotimi Agama has called on capital market operators to embrace innovation, as a key factor in the capital market’s resilience, efficiency, openness, and sustainable growth.
This was disclosed in a statement by Agama at the 2024 Capital Market Solicitors Association Annual Business Summit in Lagos with the theme ‘Revolutionising the Nigerian Capital Market through Innovative Financial Instruments for Sustainable Development’, according to The Punch.
Agama stated that the SEC is taking a proactive approach to amending laws to allow for the emergence of technologically driven financial goods and services. The strategy also aims to facilitate technological breakthroughs and promote a strong and stable ecosystem within the capital market.
He said “In its 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. The programme allows them to operate for one year within a highly fortified and limited regulatory perimeter while the SEC develops applicable rules that address these innovative technologies.
“The incubation programme helps ensure investor protection and market stability while fostering financial technology advancements in the Nigerian capital market. Central to the SEC’s strategy is the Regulatory Incubation Programme, designed to support new fintech businesses and enable the SEC to develop appropriate rules that address the challenges and opportunities presented by innovative technologies.
“Underpinning these efforts is 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,” he said.
Agama intimated stakeholders about associated risks such as cybersecurity threats, regulatory complexities, and market volatility.
He said that technology has unquestionable potential, but adopting it is not without its challenges; therefore we have to be careful to balance the investigation of robust instruments with strong risk management systems.
Agama added, “The SEC will ensure appropriate safeguards are in place to protect investors and maintain market stability.”
He pointed out the significance of strong risk management frameworks to mitigate these risks effectively while ensuring investor confidence through transparency and clear communication, which remains a priority for the SEC to sustain market stability amidst technological advancements.
Ambusiness had reported that the SEC stated that one of its motivations for starting the regulatory incubation program for fintech was to ensure the security of investors and their capital market investments.
