The Securities and Exchange Commission has announced its firm stand against allowing illicit funds to enter the capital market through the new banking recapitalization process.
Dayo Obisan, the Executive Director (Operations) of the commission, shared this during a symposium hosted by the Association of Capital Market Academics of Nigeria under the theme ‘Banking Sector Recapitalization Implications for the Nigerian Capital Market’.
Obisan expressed the commission’s optimistic view on the banking sector recapitalization initiative and emphasized its commitment to collaborating with stakeholders to ensure a seamless process.
He mentioned, “Our perspective at the SEC is entirely positive. The journey has commenced, and significant efforts are underway behind the scenes to facilitate a successful and impeccable recapitalization that leverages past experiences, aiming for a more conducive and favorable environment.”
He added, “We are keen on learning from both our missteps and successes, identifying areas for improvement, and steering clear of potential risks. The focus is on ensuring clean and verifiable funds are infused into the system to avoid dealing with illicit money post facto.”
While acknowledging that fund verification does not fall within their direct purview, Obisan expressed readiness to collaborate with other regulatory bodies to prevent the infiltration of illegal funds into the capital market.
He suggested, “Engagement with institutions like the CBN, NFIU, and CAC becomes crucial for effective fund verification processes. These collaborations will inform our decision-making and application review procedures.”
Observing the concerns raised by the Chairman of the Senate Committee on Capital Market, Osita Izunaso, regarding illicit funds, Obisan assured that the SEC was proactive in addressing such issues.
Adding to the discussion, Oluwole Adeosun, President of the Chartered Institute of Stockbrokers, affirmed the market’s capability to support the capitalization drive and encouraged banks to explore diverse fundraising avenues beyond rights issues to attract new investors.
Adeosun recommended a mix of private and public offers to raise the substantial capital needed and diversify the investor base, leading to opportunities for younger investors to participate in the market.
Despite expectations of no bank mergers due to the banks’ prior stability and the two-year timeframe for raising funds, Adeosun anticipated positive outcomes from the recapitalization exercise.
Toyin Sanni, the Chief Executive Officer of EmergingAfrica Group, lauded the recapitalization initiative, foreseeing an increase in foreign capital inflow as a positive outcome for the country.
In late March, the CBN raised the minimum capital requirements for banks in Nigeria, setting new thresholds for different categories of banks to strengthen the financial sector.