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The Central Bank of Nigeria (CBN) has said it is working with
the Securities and Exchange Commission (SEC) towards creating a single
registrar for all securities in the capital market.

Samuel Oni, CBN Director for Banking Supervision, who stated
this at a workshop in Benin, Edo State capital, said this is part of effort at
ensuring stability of the Nigerian financial system.

Registrars are
institutions that keep the register of shareholders of a company and coordinate
the payment of dividends and other fiduciary benefits that come with owning
shares in such companies.

There are currently over 10 registrars handling the register of
the over 200 listed equities on the Nigerian Stock Exchange as well as several
other public companies in the country.

Pillars of reforms

Mr. Oni said this is part of the four pillars of the banking
system reforms which the Central Bank started on 14 August last year when it
intervened in some banks that were deemed to be weak. The four pillars,
according to him, are; ensuring the quality of banks, establishing financial
stability, enabling healthy financial sector revolution, and ensuring that the
sector contributes to the real sector. “To ensure financial stability, the CBN
would champion the development of the capital market through the improvement of
its depth and accessibility as an alternative to bank funding,” he said.

The CBN director also
stated that the single registrar would allow for better coordination and
regulation of market activities. “To restore public confidence and credibility
in the banking system, the CBN carried out an exercise to review, evaluate and
determine the quality of bank portfolios especially their exposure to margin
lending,” he said.

Arumah Otteh, the Director General of SEC, recently stressed the
need for close collaboration with all other regulatory agencies in the
financial sector towards maintaining close monitoring and regulation of
operators. Ms. Otteh said the Financial System Regulatory Coordination
Committee (FSRCC), which comprises the CBN, Nigerian Stock Exchange, National
Pension Commission, National Insurance Commission, Corporate Affairs
Commission, provides the platform for the regulators to do a better job. Mr.
Oni explained the Central Bank was working at reducing the informal sector and
ensuring greater financial inclusion as the economy size not captured by
official data is too large to be ignored. “Enhanced financial inclusion would
result in more accurate measurement of economic outputs, increase the tax base
and tax revenue as well as more effective policy development and more efficient
use of financial infrastructure,” he said.

Late intervention

Biodun Adedipe, managing partner of Biodun Adedipe and Co. said
the intervention of the CBN in the banking sector last year that resulted in
the injection of N620 billion to rescue eight distressed banks was inevitable.
“As far back as 2006/2007, I expected the Central Bank to have conducted a credit
audit which should have been the major plank of the stress test that the CBN
did between July and August last year,” he said. “So clearly, the fault was on
both sides of the divide not only on the part of operators alone.”

Mr. Adedipe added that the CBN should give current shareholders the right of
first refusal before inviting other interested parties to pick up the eight
rescued banks. “The CBN should engage operators more in dialogue and ensure
that its policy initiatives are inclusive rather than creating the impression
that the ideas are lacking here or that everyone around is a rogue,” he said.