SEC updates regulations for government and corporate borrowing
The Securities and Exchange Commission (SEC) is revamping the rules and regulations for government and corporate borrowing. Dr. Emomotimi Agama, the Director General of the SEC, has emphasized the importance of sustainable borrowing practices for all levels of government, including local and state governments. This initiative follows a recent Supreme Court decision permitting direct financial support from the Federal Government to the 774 local government areas.
Dr. Agama stressed the need for strategic borrowing to foster development in various sectors. Additionally, new regulations regarding Central Counter Parties (CCPs), intermediaries that assist in managing trading between companies, are set to streamline the borrowing process for Nigerian businesses looking to raise capital in 2025.
In an effort to diversify the capital market, Nigeria plans to introduce derivatives—financial contracts tied to the future price of an asset. The SEC is working on creating laws and regulations to establish a clear and secure trading environment for derivatives, separate from general insolvency laws, to attract more investors to the market and build trust in derivatives trading.
By enhancing regulations and introducing new financial products, the SEC aims to stimulate economic growth, instilling confidence in businesses and investors nationwide. Their focus is on creating a safer and more reliable trading atmosphere to increase participation and investment in Nigeria’s financial market.
