Agenda for SEC DG, Gwarzo
Goddy Egene writes as Mounir Gwarzo awaits his confirmation by the Senate as Director General of the Securities and Exchange Commission, capital market stakeholders bare their minds on what Gwarzo should do to move the market forward
Last week was historic for the Securities and Exchange Commission (SEC) following the approval given by President Goodluck Jonathan that its acting Director General (DG), Mr. Mounir Gwarzo, be confirmed as the substantive DG. This is the first time an acting DG is not being replaced with another person from outside the commission. Hence, the staff of the apex regulator of the nation’s capital market received the news of the confirmation with great joy.
The confirmation is a big morale booster for the staff and management considering the past experience in the commission. According to some staff members of SEC, the confirmation of Gwarzo has sent two strong messages. The number one message is the beginning of the building of a good succession plan. This implies that the realisation that the next DG would come from within,would always make them put in their best. Secondly, the confirmation signifies that hard work pays.It is believed that the performance of the commission since Gwarzo began acting in January contributed to his approval for confirmation.
Some market operators said the kind of efforts made by the DG and his management within three months indicate that if given the opportunity to run the commission, Gwarzo would make significant contributions needed to move the market to the next level.
The confirmation
President Goodluck’s approval of the confirmation of Gwarzo came last week Monday. The president also approved the appointment of former Governor of Anambra State, Mr. Peter Obi as the new chairman of SEC. Some stakeholders have said President Jonathan ought to have waited for the incoming administration of Mohammadu Buhari to make the appointments. However, what Jonathan did was in fulfillment of a promise he made to capital market stakeholders when he visited the Nigerian Stock Exchange (NSE) in March. According to him, given the crucial role of SEC in the financial system, he did not want the commission to be without a substantive DG for too long.
He therefore assured the capital market operators that the appointment would be announced before the end of April.
“I do not want someone to act for too long. I don’t have anyone in mind, if you know anyone then suggest them to me,” he had told the capital market stakeholders.
Based on the foregoing, operators in the market came together and made a recommendation to the presidency that Gwarzo be made the substantive DG of the apex regulator of the nation’s capital market. A request the president accepted and consequently approved Gwarzo’s confirmation as the DG of SEC. However, Gwarzo has a last hurdle to scale, which is the final confirmation by the Senate
Stakeholders’ Agenda
Meanwhile, as the confirmation is being expected from the Senate, market stakeholders have started advising the new SEC boss on what to do to ensure the market regains investor confidence and play its role of capital formation and wealth distribution. A stockbroker and Managing Director/Chief Executive of APT Securities and Funds Limited, Mr. Kasimu Kurfi, said he should keep up with the good work he has started by treating issues timely.
“He should continue with the public enlightenment to restore the confidence of local investors. He should continue with the recapitalisation of capital market operators, demutualisation of the NSE and have zero tolerance for fraudulent practices. He should make more rules for new products such as directives and short selling and pay more attention to capacity building,” Kurfi said.
To the General Secretary of Independent Shareholders Association of Nigeria(ISAN), Mr. Adebayo Adeleke, the SEC boss should carry all stakeholders along.
“Gwarzo should ensure that minority shareholders are represented in all capital market committees because they are the pivot of the investment system. He should pursue positive reforms on the demutualisation and create more awareness for the market as medium for long term capital formation, and reduce settlement period,” he said.
The President, Renaissance Shareholders Association of Nigeria, Olufemi Timothy said the SEC boss must have zero tolerance for any form of corrupt practices.
“He must demand for the obedience of Companies and Allied Matters Act, rules and regulations in the market.He should ensure due process, fairness, equity and justice in the market,” Timothy said.
In his opinion, the Chairman of Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, Gwarzo has started well given the actions he has taken so far.
“He should look at the enforcement of rules already introduced into the market by the commission. He should ensure that the rules are adhered to by operators.If he can effectively police existing rules, he will go a long in the efforts to reposition the market,” he said.
Before now,the MD of Partnership Investment Company Limited, Mr. Victor Ogienwonyi, said Gwarzo was an insider with very good knowledge of how SEC works and should know what to do to position the commission so as to effectively play its regulatory role.
According to Ogienwonyi, who is also the Chairman of Association of Issuing Houses of Nigeria (AIHN), the SEC boss must work quickly to reconcile and get the support of all staff of the commission.
“The DG is an insider, with very good knowledge of how SEC works. He must quickly work to reconcile and get the trust of all staff of SEC to be ready for the work ahead. The reforms of the last few years need to be sustained,” he said.
However, he observed that the Investment and Securities Act (ISA) places too much unnecessary responsibilities on SEC and needed to be reviewed to make the commission more effective.
The MD of Finawell Capital Limited, Mr. Babatunde Oyekunle, said the first thing Gwarzo should do is to restore the confidence of local investors and ensure their participation in the market.
“Market awareness must be taken to rural communities. There should be more aggressive investor education. There must be zero tolerance for market infractions and preservation of market integrity by monitoring self-regulatory organisation. He should also engage in dialogue and interaction with all market stakeholders on how to move the market forward,” Oyekunle said.
In the opinion of the Managing Director of Standard Union Securities Limited, Sehinde Adenagbe, Gwarzo must play by the rules, carry staff and stakeholders along on policy formulation.
“He should put the good of the market above self-interest. He should be detribalised and embark of awareness campaign to meaningful and beneficial audience and think of how to bring back confidence and integrity market,” Adenagbe said.
For the MD of Highcap Securities Limited, Mr. David Adonri, the DG should continue his oversight function with undiminished intensity.
“He should devout a lot of attention to the primary market which is yet to recover. He should discontinue the recapitalisation policy, which is a wicked plan by the ex DG to chase several operators away from the capital market,” Adonri said.
Speaking in the same vein, the MD of Crane Securities Limited, Mr. Mike Ezeh, said Gwarzo should come up with enlightenment programme that would bring investors back to the stock market.
“A lot is expected from him particularly bearing in mind the fact that he has a superlative training advantage of both being an operator and also having worked at several levels as a regulator as well. A lot needs to be done by him in order to cover lost grounds. As a seasoned technocrat, he does not need the services of consultants from outside SEC in place of well- trained SEC commissioners, directors, deputy directors and other myriad of professionals to move the market forward,” Ezeh said.
Another stockbroker and MD of Perfecta Securities Limited, Mr. Emma Eze said the DG should put aside the recapitalisation of stockbroking firm currently being pursued by the commission and restore investor confidence.
“He should put aside the recapitalisation process for now, the issue of new capital requirement will not reactivate the market, what will reactivate the market is restoration of investors’ confidence. Local investors’ confidence is number one because foreign investors are not helping the market. What concerned foreign investors is profit. Recapitalisation would be easier to embark upon if there is positive sentiment in the market,” he said.
Knowing Gwarzo
to the
Born 51 years ago, he graduated 27 years ago with a Bachelors Degree in Economics from Bayero University Kano and later went to the University of Birmingham in United Kingdom where he did his post-graduate studies in Development Finance. He trained as a stockbroker and qualified as an Associate member, CIS and became a fellow of the Institute. He is a faculty member of the Nigerian Capital Market Institute.
He has the unique exposure of working as an operator and regulator in both the primary and secondary segments of the Nigerian capital market, which puts him in a vantage position of knowing both sides of the market. He rose from an entry level of a graduate to becoming a General Manager has a minimum 21 years working experience in the Nigerian capital market.
Gwarzo was appointed on January 2, 2013 into the Board of SEC as Executive Commissioner, Operations by President Jonathan. He became acting DG SEC last January and was also elected as the Chairman, African and Middle East Regional Committee (AMERC) of the International Organisations of Securities Commission (IOSCO) in February.
His working career spans a period of 26 years in various organisations namely: Ministry of Trade, Kano State, the NSE, Century Merchant Bank, Empire Securities Limited, SEC, Federal Mortgage Bank of Nigeria and MTL Global Investment Limited.
He has attended several courses both local and international which includes: The Securities Market Regulation by the US Securities and Exchange Commission – United States; Development of Bonds Market in Africa – South Africa; Assets Backed Securities and Mortgage Securitisation – Singapore; Credit Risk Management, Dubai; Advanced Management programmes (AMPs) at INSEAD (The Business School for the World), Fontainebleau-Paris as well as SAID Business School, Templeton College, University of Oxford – United Kingdom.