Capital Market: SEC recommends collective investments, mutual funds to cut risk

Nigeria’s Securities and Exchange Commission (SEC) has advised retail investors in the capital market to invest in Collective Investment Schemes and Mutual Funds to help reduce risk.

The Acting Director-General of SEC, Ms Mary Uduk in a statement on Wednesday in Abuja said such investments were managed by professionals and they help investors to invest in various asset classes to minimise risk.

She however reiterated the commission’s commitment to protect investors through various initiatives.

She said: “The Commission has put in place a number of initiatives to protect investors as well as boost their confidence.

“These includes the e-dividend mandate Management System, Direct Cash Settlement, we set up a committee on identity management in the Nigerian Capital Market Regularisation of Multiple Subscription and Complaints Management Framework.

“We protect investors through the National Investors Protection Fund (NIPF), Risk Based Supervision and the Complaints Management Framework.

“We want investors to take ownership of their investments; they have to be able to monitor their investments, attend Annual General Meetings as well as read the annual reports sent out to them.”

According to Uduk, the commission is working with other major stakeholders to set up a committee that will look into and proffer solutions to problems around identity management in the Nigerian capital market.

“For instance, to boost the e-dividend mandate and Direct Cash Settlement initiatives, we are engaging the Nigeria Inter-Bank Settlement System (NIBSS) to facilitate identity and account validation to enhance market processes,” she said.

She said the electronic distribution of annual accounts by public companies to shareholders had continued to record tremendous success, as shareholders had accepted the new initiative.

She said the SEC and other stakeholders had continued sensitisation to further enlighten shareholders on the benefits of the initiative.

On the need to grow the market for trading in securities on unlisted public companies, Uduk said the SEC was collaborating with relevant stakeholders to assist public companies yet to register their securities to do so without much difficulty.

The acting director-general also said innovations in financial technology had made possible the potential of using digital tools to make financial services available to a wider range of consumers and enterprises.

She said innovative technology had also promoted financial inclusion and the affordability of financial services in the country.

“A financially inclusive society will provide increased access to finance, especially for women, help support sustainable growth and will create a million more jobs.

“The gains of having a more inclusive financial system are enormous, as it helps broaden financial markets and make policies more effective.

“These initiatives continue to highlight and promote developments and trends in the Nigerian capital market and drive financial inclusion aimed at reducing adult exclusion from financial services,” the statement read in part.

Source: NAN