Dr. Emomotimi Agama, the Director General of the Securities and Exchange Commission (SEC), recently emphasized the critical role of investor education as a cornerstone for a healthy market and heightened market confidence. His comments came during the official launch of the 2024 International Organisation of Securities Commissions (IOSCO) World Investor Week (WIW) at the FMDQ Exchange in Lagos.
“Investor education empowers individuals to make informed decisions, safeguarding them against fraud, Ponzi schemes, misinformation, and excessive risk,” Dr. Agama observed through Mr. Bola Ajomale, the SEC’s Executive Commissioner for Operations. He pointed out the increasing participation of retail investors in Nigeria and stressed the urgent need for enhanced educational initiatives, especially in today’s digital finance environment.
“With the complexity of financial products and the rise of fintech and cryptocurrency trading, it’s essential for all stakeholders to commit to equipping investors with the knowledge necessary to navigate these markets with confidence and responsibility,” he added.
Dr. Agama highlighted that World Investor Week presents an invaluable opportunity to underline this commitment. “Throughout this week, we will engage with investors, share best practices, and focus on enhancing transparency and accountability within financial markets. I encourage all participants to capitalize on these opportunities to learn and exchange knowledge as we work toward establishing a robust, investor-friendly ecosystem.”
Looking ahead to 2024, the emphasis on Technology, Digital Finance, Crypto Assets, and Sustainable Finance is particularly relevant. “These areas are pivotal in shaping the future of global capital markets. While the potential rewards are significant, the accompanying risks must not be overlooked,” he remarked.
He acknowledged that advancements in technology are transforming capital markets and paving the way for increased efficiency, transparency, and inclusivity. “In Nigeria, the rapid adoption of mobile technology and digital payments showcases the tremendous growth potential in digital finance,” he noted.
Assuring that the SEC is working closely with other regulatory bodies, Dr. Agama confirmed that frameworks will be put in place to protect investors as technology continues to evolve. “Our aim is to ensure that technology is utilized responsibly, while keeping investor awareness of risks, such as cybersecurity and data privacy, squarely in focus,” he emphasized.
Addressing the volatility of cryptocurrency markets, especially concerning peer-to-peer transactions, Dr. Agama reiterated the need for robust investor protection. The SEC has taken proactive steps to develop regulatory frameworks for Virtual Asset Service Providers (VASPs), aiming to mitigate risks associated with fraud and market manipulation while still encouraging innovation. “Our regulations are designed to nurture innovation in a secure environment while ensuring market integrity without hindering growth,” he stated.
Among the new initiatives being launched is a Regulatory Incubation Programme, focused on testing new technologies and digital assets, alongside an Accelerated Regulatory Incubation Programme aimed at non-registered crypto operators to enhance regulatory oversight.
Regarding sustainable finance, Dr. Agama pointed out its global significance and its growing relevance in Nigeria, where environmental, social, and governance (ESG) considerations are becoming increasingly important in investment decisions. He emphasized the need for stakeholders to stay alert to the evolving risks presented by global market interconnections, including economic volatility and cyber threats, as Nigeria’s market continues to evolve.
“We, as a unified capital market, express our commitment to IOSCO in fostering cross-border collaboration to ensure our regulatory frameworks evolve alongside these developments,” Dr. Agama concluded. “Together, we can uphold the highest standards of transparency, fairness, and investor protection.”
Lagos Governor Mr. Babajide Sanwo-Olu also shared insights on the state’s position as Nigeria’s commercial hub, where innovation, technology, and finance intersect. He stressed the importance of engaging thoughtfully and strategically with the changes brought by digital assets and technology.
“While cryptocurrencies and blockchain hold the potential to make finance more accessible, we must remain mindful of the regulatory and investor protection challenges they present,” he stated. “The role of IOSCO in advancing investor education and maintaining market integrity is vital as we navigate this new financial landscape.”
Governor Sanwo-Olu further highlighted sustainable finance as a key focus for the week, asserting that investing in green technologies and socially responsible enterprises is both ethically sound and financially wise for long-term stability. He wrapped up his remarks by advocating for a balanced approach to innovation and investor protection, stressing the need for inclusivity in a swiftly evolving financial system.
