“You Cannot Use Cash to Buy Real Estate”: CBN Reacts to Proposed Investment and Securities Bill
- The CBN stated that certain clauses of the SEC's proposed ISB 2024 might be in violation with current money laundering regulations
- The Investment and Securities Act of 2007, which was created by the Senate Committee on Capital Markets, is intended to be repealed by the bill
- SEC Director-General Emomotimi Agama however said that the new bill divided and categorized the agency's duties and authority
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
The Central Bank of Nigeria (CBN) said that some elements in the Securities and Exchange Commission's (SEC) proposed Investment and Securities Bill (ISB) 2024 may be in violation of current money laundering regulations.
Source: UGC
CBN official Tukur Galadima brought up the issue during a public meeting in Abuja on Thursday, The acble reported.
The purpose of the bill is to abolish the Investment and Securities Act of 2007, which was created by the Senate Capital Market Committee.
Proposed bill to grant SEC complete authority
The term "public companies" in the SEC's extended regulatory remit, according to Galadima, was a key problem with the proposed bill.
According to him, the proposed bill would grant the SEC complete authority over publicly traded corporations.
Galadima asserts that banks and other financial firms that fall under the central bank's jurisdiction are examples of public enterprises.
“I think if we take last year’s harmonized position, that problem will be easily solved,” he said.
Galadima also suggested that the committee remove section 193 of the proposed bill which permits multi-currency investment.
“The issue of currency is strictly with CBN,” he said,
Use of cash to purchase security
The member also cautioned that the bill's provisions permitting cash purchases of securities would promote money laundering and violate the Foreign Exchange (monitoring and various provisions) Act of 1995.
“That is illegal as it is now. You cannot also use cash to buy real estate,” Galadima said.
“There are several transactions that you cannot do with cash under that Act.
“So, for you now to say that somebody can use cash to buy securities, that is completely illegal.”
However, Galadima promised that the CBN fully supports the Investment and Securities Act modification.
Alongside the SEC, he encouraged the Senate to examine its views for effective regulation.
“We are, as always, willing to work with SEC, to work with the committee, to work with all the stakeholders to ensure that the bill is speedily passed”, he added.
On his part Emomotimi Agama, director-general of the SEC, in his submission, said the functions and powers of the SEC were separated and stratified in the new bill.
In his proposal, SEC Director-General Emomotimi Agama said that the new bill divided and categorized the SEC's duties and authority.
According to Agama, the SEC will be able to maintain its signature status by registering and regulating derivatives markets, registering and regulating collateral management firms, and sanctioning unauthorized and unlawful transactions in securities and investment schemes thanks to the new functions and powers granted.
SEC set to sanction Nigerian banks
Legit.ng reported that a framework to help the Central Bank of Nigeria (CBN) in its efforts to strengthen the nation's banking industry has been made available by the Securities and Exchange Commission (SEC).
The framework, posted on the SEC website on Friday, attempts to guarantee a seamless, open, and effective capital-raising procedure for banks and holding companies participating in the CBN's bank recapitalization initiative.
During the 2024–2026 recapitalization phase, the framework will offer banks principles and processes for raising capital through private placements, rights issuing, and other permissible ways.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Source: Legit.ng
