New Nigeria SEC boss vows tough line on transparency

February 5, 2010

    By Oludare Mayowa
   LAGOS, Feb 5 (Reuters) – The new head of Nigeria’s Securities and Exchange Commission (SEC) on Friday vowed tougher penalties for anyone infringing capital markets regulations in an effort to help restore investor confidence.
   Sub-Saharan Africa’s second-biggest economy is seen as one of the world’s final scaleable frontier investment destinations with a population of more than 140 million people, but weak regulation and impunity for offenders have clouded its image.
    Arunma Oteh, a former vice president of the African Development Bank (AfDB) who took over in January as SEC chief executive, pledged to improve transparency in Nigeria’s capital markets, at one point among the fastest growing in the world.
   “I am determined to eliminate sharp practices, deter malpractice and change behaviours by ensuring that both the institutional and personal costs of any wrongdoing are extremely high,” Oteh told a press conference in Lagos.
   She said the commission would embark on a major reform to rebuild the capital markets, which were characterised by weak governance that had allowed infringements such as insider trading and share price manipulation to go unpunished.
   Oteh said the SEC would push for higher levels of disclosure and better regulation of accounting practices, including the adoption of International Financial Regulatory Standards (IFRS) by companies listed on the stock exchange.
   “The absence of transparency undermines the market and creates perverse incentives for those individuals determined to bend the rules,” Oteh said, adding the SEC would enforce a comprehensive risk management framework.
   Critics of the SEC say that Oteh’s predecessor was too close to stockbrokers and operators of the stock exchange, undermining the commission’s credibility as a regulator.
   Her pledge to improve transparency comes at a time when Central Bank Governor Lamido Sanusi is also pushing through a major reform of the banking system aimed at improving weak corporate governance and transparency.
   His efforts, including a $4 billion bailout and the removal of several bank chief executives last year, have won praise from international investors.
   Nigeria’s all-share index fell more than a third last year, chopping 27 percent off its capitalisation to 7 billion naira ($47 million) and making it one of the world’s worst-performing emerging markets.
   Analysts say equity valuations now look attractive and that the market could be set for a major rebound.
 (For more Reuters Africa coverage and to have your say on the top issues, visit: ) (Editing by Nick Tattersall and Andy Bruce) ((Reuters messaging:, Lagos Newsroom +234 1 463 0257))
 Keywords: NIGERIA SEC/
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 Friday, 05 February 2010 15:01:11RTRS [nLDE61419Z] {EN}ENDS

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