SEC DG Tasks Lawyers on Capital Market Cases

The Director General of the Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo yesterday called on legal practitioners to refrain from instituting unnecessary litigations at the instance of their clients who are involved in an enforcement action of the commission.

Gwarzo, stated this at a session on “Creating Secondary Market for Investors”, at the annual general conference of the Nigerian Bar Association (NBA).

Making this plea, the SEC DG added that this would ensure the support of the legal profession to the commission, thereby allowing the capital market regulator to perform its statutory function and adequately protect investors with the aim to continuously develop the Nigerian capital market and the economy in general.

Supporting his plea, he cited the quote of Ngwuta JSC in Joshua Chibi Dariye vs. Federal Republic of Nigeria (2015) LPELR- 24398 where the learned Justice of Supreme Court stated that although lawyers owe a duty to their client, they, however, owe a higher duty to a higher cause; which is the cause of justice.

He also encouraged law firms to merge into large firms that would possess the capacity to be listed on the floor of a securities exchange. He also urged the legal practitioners to invest in the Nigerian capital market and reap the many benefits.

This submission was re-echoed by the Chief Executive Officer of the Nigerian Stock Exchange (NSE) Mr. Oscar Onyema. He noted that as operators in the market, the lawyers have a major role to play in the development of the market as well.

However, in the course of discussions, the Managing Director of Goldman Sachs South Africa, Mr. Colin Coleman, observed the high transaction costs in the Nigerian capital market. Reacting to this, Gwarzo and Onyema admitted the high cost of transactions in the market. They emphasised that steps are being taken to ensure a reduction of both the explicit and implicit cost of transactions in the Nigerian capital market. The SEC DG acknowledged that “both explicit and implicit costs in Nigeria are higher than in peer countries.” He stressed that within a short period of time the market would feel the effect of these reductions. According to him, to start with, there will be a hair cut on SEC, NSE, Issuing Houses and Receiving Agents fees at the primary issuance side. He explained that the four cost centers charge about 70 – 80 per cent of floatation cost.