SEC to grow non-interest products to N4.179trn
The Securities and Exchange Commission (SEC) has revealed that it is planning to grow noninterest capital market products to be 25 per cent of the overall market capitalization.
The market capitalization of the entire products listed on the Nigerian stock exchange by yesterday stood at N16.717 trillion, which comprised equities, bonds and exchangetraded products.
This disclosure was made on Tuesday by the DirectorGeneral of SEC, Mr Mounir Gwarzo at a roundtable meeting with a delegation led by the Lord Mayor of the city of London, Alderman Alan Yarrow and Nigerian regulators.
Gwarzo, who was represented by Zakawanu Garuba, the Commission’s Executive Commissioner Corporate Services, underlined SEC’s goal to boost noninterest capital market product innovation so that the segment can be, at least, a quarter of the overall market capitalization.”
The SEC, he said, aims to build a strong regulatory regime for non-interest products, encourage stakeholders in the non-interest capital market and ensure the emergence of Nigeria as a prominent noninterest capital market hub both at the regional level and globally.”
SEC is already considering modalities for setting up a Sharia Advisory Council as a body of experts to advise on non-interest product applications.
To boost liquidity of noninterest products, the Commission is working with a committee to support the FMDQ platform to enable secondary market trading of the products. It is also engaging the Central Bank of Nigeria (CBN) to obtain liquidity status for non-interest products (especially the sukuk).” All these efforts, Gwarzo explained, are hinged on the fact that “Nigeria has more than 80 million Muslims, compared to Malaysia’s total population of 30 million.” He added that Nigeria has a larger economy than Malaysia’s, “being largest economy in Africa.”
It was with a view to harnessing this potential, Gwarzo said, that SEC set up an industry-wide committee of experts last year to produce a 10-year master plan on non-interest capital market products. The committee’s recommendations have been incorporated into the broader capital market master plan, which the Commission, Gwarzo said, has begun implementing.
Yarrow pledged the United Kingdom government’s support for non-interest financing in Nigeria, stressing that “two things were universally agreed on: Islamic finance will be massive and it’s here to stay.”
The Lord Mayor called on members of the Nigerian capital and financial derivatives markets to “talk to him, the business delegation and The City UK” on Islamic finance, legal services or education, training and qualifications. “That’s why we are here. And we all look forward to helping you in whatever way we can,” he assured.
Mounir Gwarzo, SEC DG