SEC Masterplan to Increase Market Cap by N5 Trillion

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CEM REPORT, FINANCE | The Capital Market Masterplan (2021 – 2025) launched by the Securities and Exchange Commission (SEC) bears a projection of 50 listings of Shariah-compliant products with a market capitalisation of at least N5 trillion by the year 2025.

The revised edition of the plan also projects one million or more direct investors in Shariah-compliant products with at least N5 trillion investment by institutional investors in Shariah-compliant products in the Non-Interest Capital Market (NICM).

According to the Director-General of the SEC, Lamido Yuguda during the opening of a three-day capacity-building workshop for local Shariah talent for Non-Interest Capital Market held at the SEC head office in Abuja, Wednesday, the “Commission in recognizing the potential of the Non-Interest Capital Market for economic growth, dedicated a component in its 10-year (2015-2025) Capital Market Masterplan for the speedy development of the Market in the financial system.”

He explained that the Masterplan provides clear strategic objectives for the development of the Market, one of which is the “encouragement of the development of stakeholders for the Market” and the day’s workshop is evidence of the realisations of the particular objective.

He added that “As you may be aware, the major difference between Conventional Finance and Non-Interest Finance is the application of Shariah principles. This simply means that Non-Interest Financial Market cannot exist without experts in Islamic commercial jurisprudence (FiqhulMu’amalat Al-Maliyya). Therefore, this workshop will help in fast-tracking the development of experts for the Market. We believe that it would be a magic lamp for developing our local Sharia talent, not only for Nigerian Capital Market but for the Nigerian Financial system in general.

“The level of activities in the Non-Interest capital market that we are currently experiencing in Nigeria affirms the overwhelming acceptance of NICM products by the country’s populace. This shows a strong appetite for other alternative forms of investments.

“Recently, the Market witnessed the entrance of institutions offering Non-Interest capital market services/products and the oversubscription of the FGN and corporate Sukuk, further buttresses the need for this workshop to encourage the development of Shariah experts for the Market.”

The SEC Boss stated that NICM has so much potential in the country by attracting an untapped investor base that appears indifferent to conventional instruments, to participate in the capital market as well as the existing investors to diversify to ethical and socially responsible investments.

“We believe that developing Shariah talent through a workshop like this, is another opportunity of creating awareness for the Non-Interest Capital Market products and services which in turn will facilitate the Financial Inclusion drive in the Nigerian Financial System.

“I am happy to note that the Commission recently exposed registration Rules to set a minimum standard for corporate or individuals seeking to provide shariah advisory services for Non-Interest Capital Market activities. This is to further encourage and attract the attention of qualified persons and entities to engage in the Shariah advisory function for Non-interest Capital Market.”

Yuguda noted that with these new responsibilities, promoting capacity-building programs, such as the workshop, on Sharia-compliant processes and products (Regulators and Operators) has become necessary for the NCIM.

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Additionally he said the workshop is aimed at exposing participants who have the potential to provide Shariah advisory services for the Islamic Finance Industry, particularly the Non-Interest Capital Market’s operations as it relates to Shariah principles and rulings.

“It is also planned to be in two levels, Level 1 and 2”, adding that “Level 1, is focused on the basic areas of Financial Market Structure and Operations of the Capital Market, Shariah principles and contracts relating to Non-Interest Capital Markets as well as Shariah issues relating to the operations and businesses of the Market, among others while level-2 which will address the operation of the Sukuk and Equity Markets”.

Furthermore, he expressed the confidence that the participants will benefit from the vast knowledge and experience of the facilitators, which will bring about a much-needed impact on the participants and the market in general.

 

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