The Director General of the Securities and Exchange Commission (SEC) Mounir Gwarzo has urged legal practitioners in the country to refrain from instituting unnecessary litigations at the instance of their clients who are involved in an enforcement action of the commission. Gwarzo disclosed this during a panel session at the ongoing 2017, Annual General Conference of the Nigerian Bar Association (NBA) in Lagos.
Gwarzo who was discussing on creating secondary market for investors, explained that this would ensure support of the legal profession to the commission, thereby allowing the commission to perform its statutory function and adequately protect investors with the aim to continuously develop the Nigerian capital market and the economy in general.
In buttressing his point, he drew the attention of the participants to a quote of Ngwuta JSC in Joshua Chibi Dariye vs. Federal Republic of Nigeria (2015) LPELR- 24398 where the learned Justice of Supreme Court stated that although lawyers owe a duty to their client, they however owe a higher duty to a higher cause, which is the cause of justice.
While, he encouraged law firms to merge into large firms that would possess the capacity to be listed on the floor of a Securities Exchange. This submission was re-echoed by Oscar Onyema, the Chief Executive Officer the Nigerian Stock Exchange (NSE).
On his part, Colin Coleman, Managing Director of Goldman Sachs South Africa observed the high quantum of transaction cost in the Nigerian capital market. Reacting to this, Gwarzo as well as Onyema emphasized that steps have been put in place to ensure a reduction of both the explicit and implicit cost of transactions in the Nigerian capital market. SEC DG acknowledged that “both explicit and implicit costs in Nigeria are higher than in peer countries”.
He stressed that within a short period of time the market would feel the effect of these reductions. To start with, there will be a haircut on SEC, NSE, Issuing Houses and Receiving Agents fees at the primary issuance side. The four cost centers charge about 70 – 80 percent of floatation cost. The commission will be addressing the secondary market as well.