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Published On: Tue, Jan 13th, 2015

Arunma Oteh bequeaths a much stronger Nigerian capital market

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Director-General, Ms. Arunma Oteh2Late September, Nigeria’s Securities and Exchange Commission (SEC Nigeria), won the “Most Innovative Capital Markets Regulator” award for the third consecutive time, having won it in 2012 and 2013; Aminu Imam, in this analysis, traces the efforts of the outgone Director-General, Ms. Arunma Oteh, which resulted in the three year-long reforms being implemented by the leadership of the SEC.

utgone Director-General of Nigeria’s Securities and Exchange Commission (SEC Nigeria), Arunma Oteh, who resigned at the weekend after a five- year eventful tenure, remembered for its passion, purpose, articulation and faithful implementation of a therapy of reform measures driven by the vision to transform the Nigerian market into world-class market.

Oteh was appointed by the late President Umaru Musa Yar’adua in 2009, but resumed in January 2010.

During her tenure, the capital market witnessed significant product innovation, improved listing rules, landmark bond market reforms widening of participation in the markets through licensing and coming on stream of other capital trade points.

She was in a hurry to see Nigeria achieve a world-class capital market that would drive development and make Nigeria one of the most attractive investment destination.

Under her leadership, the SEC also championed reforms at the Nigeria Stock Exchange (NSE) that witnessed a more robust output and delivery in its operator/oversight role.

Listed among her accomplishments are: Restoration of investor confidence through strong enforcement actions and improvement of rules and regulations and investor education.

Other accomplishments include creative Initiatives, which include partnership with Nollywood to produce movies, an annual integrity award to promote integrity and capital market knowledge.

SEC also established the National Investor Protection Fund and strengthened its Administrative Proceedings Committee

She would also be credited with deepening and broadening the market, whereby it witnessed significant product innovation, improved listing rules, landmark bond market reforms (which brought it almost at par with the equities market and made it attractive enough for Triple A issuers such as African Development Bank (AfDB) and International Finance Corporation (IFC) to issue bonds), introduction of Exchange Traded Funds (ETFs), widening of participation in the markets through licensing and coming – on – stream of other capital trade points like National Association of Securities Dealers (NASD) and Financial Market Dealers Quotation (FMDQ) that have expanded market access.

Ms. Oteh also restored market integrity through zero-tolerance for rule infractions. The SEC’s enforcement machinery was significantly strengthened to respond to this new emphasis.

In addition to other measures, an 18-man Nigeria Police Force team was deployed as a resident enforcement team at the SEC to respond to enforcement matters with speed and promptitude. This was unprecedented in the history of the apex regulator.

Strengthening disclosures and transparency; SEC Nigeria, under her leadership, strengthened disclosure requirements and spearheaded the implementation of international financial reporting standards for listed companies.

Promoting good corporate governance:As far back as 2011, under Oteh’s leadership, the SEC published a new Code of Corporate Governance for the Nigerian markets, aimed at standards improvement in line with international best practice. In addition to a significant improvement in corporate governance, the code is now mandatory. SEC’s role in revamping corporate governance at Ecobank Transnational Incorporated(ETI) was globally recognized.

Building capacity in the market: Within the SEC, capacity building took unprecedented heights intended to strengthen the capital market as a whole, by specifically enhancing personnel and technological capacities at the SEC Nigeria through (re) training of human capital.

Pursuant to the human capital enhancement goal the outgone DG streamlined the training function at the SEC Nigeria, to make it more relevant and responsive to the apex regulator’s capacity needs; she instituted the SEC Learning Series with the objective to foster a culture of learning and knowledge seeking at the SEC Nigeria especially in relation to critical issues that relate to capital markets, economic diplomacy, macro economy and the larger society.

Beyond the capital market, under Oteh’s leadership, the SEC instituted an Annual SEC Journalists’ Academy, a skills improvement workshop aimed at strengthening transparency and accountability in the markets through improved professional journalistic reportage. A journalists’ on-line essay competition was also instituted, to stimulate interest in reading and writing about the markets among Nigeria’s community of practicing journalists. Prize winnings at this competition are in the form of exposure to trainings in elite local and foreign learning centers.

She also created a forum for delivering capacity enhancement to shareholders in Nigerian companies called the “SEC Shareholders’ Academy”, to enable the role of this important stakeholder public in fostering sound corporate governance in the Nigerian capital market.

Under her leadership, the SEC also championed reforms at the Nigeria Stock Exchange, which has witnessed much more robust output and delivery in its operator/oversight role.

The initiative to revamp listing rules led to landmark transactions such as the dual listing of SEPLAT Petroleum on the NSE and the London Stock Exchange in April 2014, as well as the development of an alternative securities market.

Ms. Oteh provided thought leadership on the role of the capital market as an enabler of socio economic development, an efficient mechanism for capital allocation, and for fostering meritocracy in the economy and ultimately peace and prosperity in the society through efficient resource allocation.

Her passion in seeing the Nigerian market become a world class one and the fulcrum of socio –economic development informed her leading a market-wide effort which culminated in the launch of the 10 year capital market master plan in November 2014 which supplies a strategic architecture for repositioning the Nigerian capital market as one of the best and biggest globally within the envisaged timeframe, re-focus the market and help double its size over time and grow the economy

The role and reputation of the Nigerian capital market in the International arena was significantly enhanced through SEC Nigeria’s greater visibility and contribution in international regulatory for a, like the International Organization of Securities Commissions (IOSCO) and its Africa and Middle-East Regional Committee (AMERC). In both organizations,Oteh played influential roles in their highest decision making echelons.

The spike in the SEC’s reputation and renown has made both the apex regulator as well as Ms.Oteh serial winners of awards and laurels bestowed by local and foreign organizations.

She will certainly be remembered for rescuing the capital market from the doldrums in which it was mired as a result of sharp practices that were rife and the global financial crisis, soon after she assumed office in January 2010.

From a market capitalization of N4.99 trillion in January 2010 and through therapy of reform measures catapulted the NSE capitalization to its peak of over N14 trillion in 2014. The Nigerian stock market, which rose by 35% in 2012 and a further 47% in 2013, was also amongst the ten best performing markets in the world that same year.

Even though by end 2014, the NSE capitalization had regressed to 11.5 trillion on account of combined macro – economic forces, there is every reason to believe that the market will quickly bounce back after elections and with improved crude prices.

Even the most pessimistic observer would agree that the fundamentals of the market bequeathed by Oteh remain significantly sound. She has also left behind strong market institutions and a strong SEC Nigeria. SEC Nigeria has consequently earned global laureates including the Africa Investor Innovative Regulator for 2011, 2013 and 2014.

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