Senate passes investments, securities bill to curb fraudulent practices in capital market

The senate has passed the investments and securities bill (ISB) 2024, boosting the operations of the Securities and Exchange Commission (SEC) and the Nigerian capital market.

The bill, meant to repeal the SEC Act, was passed on the floor of the red chamber on Wednesday.

During the report review on the bill, Tahir Monguno, senate chief whip, said the legislation would protect investors and eliminate fraudulent dealings in the capital market.

Leading the debate, Osita Izunaso, chairman of the senate committee on capital market, argued that the bill aims to replace the Investments and Securities Act of 2007 with the new Investments and Securities Act of 2024.

He said the ISB is capable of transforming the capital market, encouraging the influx of foreign investors as well as boosting investors’ confidence.

“The Bill seeks to… establish a new market infrastructure and wide-ranging system of regulation of investments and securities businesses in Nigeria especially in the areas of derivatives, systematic risk management, financial market infrastructure and Ponzi scheme and platforms,” Izunaso said.

“It was meant to establish the Securities and Exchange Commission as the apex regulatory authority for the Nigerian Capital Market. It will be a regulation of the Market to ensure capital formation, the protection of investors, maintenance of fair, efficient and transparent market, and reduction of systemic risk.”

‘ISB 2024 WILL PROTECT INTEGRITY OF SECURITY MARKET’

The chairman said the main objective of the bill was to enact a law that aligned with global dynamics as they relate to the regulation of capital markets through the provision of an innovative regulatory framework.

“It will protect the integrity of the security market against all forms of market abuse and insider dealing. It will prevent unauthorised, illegal, unlawful, fraudulent and unfair trade practices, relating to securities and investments,” he said.

Izunaso added that the primary goal of the proposed legislation is to enhance the commission’s ability to fulfill its statutory mandate effectively while revitalising the capital market sector to drive national economic transformation.

Announcing the bill’s passage, Godswill Akpabio, president of the senate, said many individuals would be encouraged to invest in the capital market once they are assured that significant risks have been mitigated.

He thereafter declared the bill passed.

On November 14, Emomotimi Agama, director-general of the SEC, said the ISB 2024 proposed a penalty of not less than N20 million or 10 years imprisonment or both for ponzi scheme operators.

Agama said the bill also prescribed stringent jail terms and other stiff sanctions for the promoters of ponzi schemes.