Director-General (DG) of the Securities and Exchange Commission (SEC), Dr Emomotimi Agama, has stressed the need for operators to remain vigilant and navigate risks associated with cyber security threats, regulatory complexities, and market volatility.
Agama, while speaking at the 2024 Capital Market Solicitors Association Annual Business Summit held in Lagos urged stakeholders in the capital market to embrace innovation as a catalyst for growth, increased efficiency, heightened transparency, and resilience.
Speaking on the theme, ‘Revolutionising the Nigerian capital market through innovative financial instruments for sustainable development,’ Agama, however, cautioned that operators must remain vigilant to the resultant risks, including cybersecurity threats, regulatory complexities and market volatility as the market embraces these innovations.
“While the potential of innovation is undeniable, embracing it also comes with challenges. Hence, we must be mindful that the exploration of new instruments must be balanced with robust risk management frameworks.
Agama said the SEC will ensure that appropriate safeguards are in place to protect investors and maintain market stability, noting that investor confidence is the bedrock of any successful market.
“Fostering trust in innovative instruments through transparency and clear communication will be key. The success of these initiatives demands collaboration by all stakeholders, including the CMSA, legal professionals, regulators, and market participants.
He assured that the commission would create a forum for open dialogue and continuous improvement to deepen stakeholders’ engagement and improve market operations.
The SEC boss disclosed that the commission is aware of the new financial products and services that are emerging due to technology and is committed to ensuring that its regulations conform and address these innovations.
He said: “The commission has a three-pronged approach to regulating innovation: safety, market deepening, and solutions to problems. This has always and will continue to help create a more efficient and reliable capital market ecosystem.
“In the efforts to support the innovation and growth in the market, the SEC had established a programme of assessment called Regulatory Incubation to help new fintech businesses.
“The programme allows them to operate for one year within a highly fortified and limited regulatory perimeter while the SEC develops applicable rules that address these innovative technologies.
“The incubation programme helps ensure investor protection and market stability while fostering financial technology advancements in the Nigerian Capital Market.”
