-by our correspondent.
The Securities and Exchange Commission (SEC) says a perceived policy conflict between the Commission’s statement on Digital Assets, their Classification and Treatment of September 11, 2020 and the Central Bank of Nigeria (CBN) Circular of February 5, 2021 are not inconsistent.
In a statement SEC said it has received several comments and inquiries from the public on the subject matter and wishes to clarify that based on the recognition of the fact that digital assets may have the full characteristics of investments as defined in the Investments and Securities Act 2007, the said Statement asserts that trading in such assets falls under SEC’s regulatory purview, except proven otherwise.
Director-General SEC,Lamido Yuguda
“The primary objective of the Statement was not to hinder or stifle innovation, but to establish standards of ethical practices that ultimately make for a fair and efficient securities market. The SEC statement at the time, was intended to provide regulatory certainty within the digital asset space, due to the growing volume of reported flows.” The statement read.
According to SEC, in its capacity as the regulator of the banking system, the CBN subsequently identified certain risks, which if allowed to persist, will threaten investor protection and financial system stability, a key mandate of the Commission, as well as the CBN.
“In light of these facts, we have engaged with the CBN and agreed to work together to further analyse, and better understand the identified risks to ensure that appropriate and adequate measures are put in place, should such securities be allowed in the future.”
CBN Governor, Godwin Emefiele
Meanwhile, as a follow up to the latest developments in the sector, SEC provided clarifications with regards to the implementation its Capital Market FinTech Strategy as follows:
- For the purpose of admittance into the SEC Regulatory Incubation Framework, the assessment of all persons (and products) affected by the CBN Circular of February 5, 2021 is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system.
- The planned implementation of the SEC Regulatory Incubation Guidelines for FinTech firms who intend to introduce innovative models for offering capital market products and services will continue.
The Commission restated its commitment to monitor the digital asset space and further engage all critical stakeholders with a view to creating a regulatory structure that enhances economic development while promoting a safe, innovative and transparent capital market.