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Just
as calm seems to be returning to the capital market, a quiet war is
brewing as stockbrokers have kicked against the decision of the
Securities and Exchange Commission (SEC) to appoint members into the
council of the Nigerian Stock Exchange (NSE).

Already,
the NSE council has written to SEC expressing its rejection of the
appointment. A source who was privy to the council meeting on Tuesday
when the appointment was rejected, said members were undivided in their
position.

“It
was an unanimous decision and the council has already written to the
Commission on its position. We are trying to make the Commission see
reasons,” the source said.

SEC
last week muted the idea of allowing the interim administrator and
interim president of the council, Emmanuel Ikhazobor and Balama Manu,
to remain as council members at the expiration of their tenure.

The
duo was appointed by SEC in the wake of the sacking in August of the
former director general of the NSE, Ndi Okereke-Onyiuke. Their tenure
was supposed to end with the assumption of office last week of the new
NSE chief executive officer, Oscar Onyema.

Guiding the new CEO

However,
SEC said its decision to allow its appointees remain on the council was
for them to guide the new CEO until he fully takes charge.

A
statement by SEC’s spokesperson, Lanre Oloyi, stated that the
appointment was to speed up the ongoing restructuring process and
prepare the Exchange for eventual demutualisation, which would allow
its shares to be listed and traded.

According to SEC, all its nominated members shall be on the Council pending the election of a new council.

“We
expect the restructuring exercise to be quickly concluded so that
elections can be conducted to establish a new council. We are hopeful
that by that time all the cases in court would have been disposed of,
so as to allow the interim president to conduct elections without any
legal impediment,” the commission said.

SEC
said it derived its powers from Section 35 (1) of the Investment and
Securities Act 2007 which states, “The Commission may, where it deems
appropriate, issue directives to a securities exchange, capital trade
point, or any other self regulatory organisation.”

No interference

The
source, however, said the section does not clearly state that the
Commission can make such appointments and thus interfere in the running
of the Stock Exchange.

“That
section only deals with market operations and not governance issues.
What the stockbrokers are saying is that the memorandum and article of
association (MEMART) establishing the Stock Exchange does not provide
for SEC to appoint members to council.”

On
the position of the Commission now that stockbrokers are challenging
its position, Mr. Oloyi said this was a temporary arrangement.

“This
is just an interim arrangement. We have only asked that the Exchange
should consider public interest in constituting membership of the
council.”

He
said the outgoing interim administrator has one month to fully handover
to the new CEO, after which he will serve as deputy to the interim
president.

“This
transitional arrangement is until a new council is properly constituted
by the Stock Exchange. I cannot tell you how long this will take. You
know there are a lot of cases in court,” Mr. Oloyi added.

He said SEC was committed to building a vibrant capital market that would be of benefit to the entire economy.