In a recent series of decisive moves, the Securities and Exchange Commission (SEC), under the leadership of Director General Dr. Emomotimi Agama, is reshaping the Nigerian capital market. Known for his calm demeanor and academic background, Dr. Agama has surprised many with policies that enforce discipline and market resilience. The first of these, the tenor limit policy, led to leadership changes in key capital market institutions like NASD and FMDQ, signaling SEC’s commitment to a more accountable and effective market structure.
Following this, SEC recently announced an increase in capital requirements for market operators. According to SEC reports, the policy is designed to strengthen market infrastructure, boost operational efficiency, and most importantly, safeguard investor funds. The initial proposal of 10% of Assets Under Management (AUM) faced pushback from fund managers, who argued that the high threshold could stifle their operations and artificially constrain growth.
Responding to industry feedback, SEC is reportedly revising the capital retention requirement from 10% to 1%, providing relief to asset managers while still reinforcing market stability. Industry insiders, including board members of major exchanges, have expressed strong support for the revised policy, highlighting its potential to encourage productive growth and deeper liquidity within the market.
Experts note that the reforms come at a crucial time, with Nigeria’s All-Share Index surpassing ₦100 trillion and the upcoming Dangote Refinery listing expected to inject further momentum. Market operators, often likened to the “legs” of the financial system, must now strengthen their capital base and governance structures to sustain growth. The reforms are also expected to drive mergers and acquisitions and filter out underprepared players, ultimately benefiting the overall market ecosystem.
While some criticism has arisen over SEC’s initial rollout of these policies, particularly regarding clarity and timing, the consensus is that the twin policies of tenor limits and capital enhancements are timely interventions. Analysts believe that these measures will not only stabilize the market but also ensure that it grows on a sustainable and irreversible trajectory, supporting both fund managers and long-term investors alike.
source: nairametrics