Reps, SEC, Disagree Over Investment Act Amendment

ABUJA, Nov 24, (THEWILL) - The House of Representatives and the Securities and Exchange Commission (SEC) today disagreed on the proposed amendment to the Investment and Securities Commission Act 2007.

The House had mandated its Committee on Capital Market and other Institutions to hold a public hearing and collate public views on its proposed amendment to the Investment Act.

But the Director General of SEC, Ms Arunma Oteh in her presentation at the hearing rejected the proposed amendment of Sections 20, 21 and 23 of the Act, which seeks to remove the commission’s powers to utilize SEC funds only through an Appropriation Act.

The bill seeks to amend the commission’s Act to provide for greater transparency and accountability in the finances of Securities and Exchange Commission and to ensure greater legislative oversight. While kicking against the bill, the Director General argued that the commission was established to regulate and develop the Nigerian capital market and was exempted from remitting its revenue into the federation account.

She noted that “it therefore believes that the fund created under section 19 of the ISA 2007 is established for that specific purpose, and therefore exempted from the requirements of section 80 (1) of the 1999 Constitution.”

The DG added that regulating the capital market would become a problem due to non-availability of funds.

“The commission is of the view that the proposed amendment if implemented will negatively affect its surveillance and enforcement activities. It is important for funds to be readily available for use by a regulator as a result of the dynamic and unpredictable nature of the market.

“Requiring SEC to pay its surplus fund into the consolidated revenue fund will slow down and undermine its regulatory and developmental efforts because it will be bogged down by bureaucracy. It should be noted that where there is no effective regulation, investors’ confidence in the market will be eroded as operators and other participants may violate market rules,’’ the DG submitted at the hearing.

Oteh maintained that the proposed amendment would adversely affect SEC’s operational activities, as it would not be able to access funds urgently when needed. She said that the appropriate committees of the National Assembly had provided adequate oversight of the capital markets and the commission and such would not require any legislation on that.

Speaking further, she urged the National Assembly to sustain the laying of annual estimates of the commission’s expenditure through its committee on capital market.

However, Chairman of the Committee, Honourable Umar Buba Jibril (PDP, Kogi) in his remarks said the committee was not out to whittle down the powers of SEC but was legitimately carrying out the work assigned to it by the House via a resolution.

“As part of the House, we have a responsibility to defend what the House is doing. It is up to you to tell us if the bill proposed is good. It will also give you the opportunity to tell us your challenges,’’ he said.