Reps C’ttee Moves For Tougher Laws To Save NSE

The Chairman of the? House of Representatives Committee on Capital Market and other Institutions, Herman Hembe, has said the failure of the? capital market saw over N20 trillion of investors' funds? going down the drain, stressing that the root causes of the crisis could have been avoided.

Identifying some of the causes, he mentioned regulatory failures, explosive mix of excessive borrowing and risks by household and unregulated ‘hot money.’

Hembe, also said that for failing to honour the invitation of the Committee to participate in a public hearing on the near collapse of the Nigerian capital market, the director- general of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyeama, would either appear before the committee in person today or face arrest.

Addressing the committee in a public hearing when she appeared before it, the Director-General of the Security and Exchange Commission (SEC), Arunmah Oteh, disclosed that the insecurity in the country has contributed to the poor performance of the Nigeria Stock Exchange (NSE) as it has made it difficult for investors to find it conducive to invest in the economy.

?“The spate of bombings by the Boko Haram sect has led to an increase in the perception of insecurity in some parts of the country with the consequent negative impact on the market,” she said.

Going further, she noted that due to the losses incurred by local investors when the market declined leading to loss in confidence in the market, getting them to return to participation in the market has been an uphill task.

She also added that regulatory lapses also contributed in the crash of the market, but assured the committee that the new management of the commission has put?? structures in place to ensure that the events that reduced the market to its present state do not reoccur in future.

“We are at an advanced stage in the establishment of an Investment Protection Trust Fund (IPTF) as required by the Investments and Securities Act,” she added.

Hembe , said? the ongoing? probe would “look into the organisational structure of the? SEC and NSE , funding issues, procedural and approval practices that impacted on the action that took place and may still exist and a review of Acts of parliament where necessary, realities of stockbroking and use of waivers.