The Securities and Exchange Commission (SEC) has announced plans to develop a comprehensive regulatory framework that would enable operators in the crypto asset space to conduct their activities in a manner that would guarantee investors protection and financial system stability.
Director-General of the SEC, Lamido Yuguda, stated this at the joint session of the Senate Committee on Banking, Insurance and other Financial Institutions, Capital Market and ICT and Cyber Crime in Abuja, Tuesday.
Yuguda said the commission recognises the disruption of FinTech in the financial industry and aims to create an enabling regulatory environment that would ensure a balance between investor protection and technological advancement.
However, he pointed out that regulators need to understand the crypto space to enable them tackle-identified risks and rev up efforts in developing the right framework for its operation.
He said, “We believe that FinTech would not only bring about efficiency to the capital market but would also serve as a veritable tool for advancing Nigeria’s Financial Inclusion agenda.
“However, there is a need to develop an appropriate regulatory framework to ensure the safety of innovation to investors and preserve market integrity.
“The SEC will continue to monitor developments in the digital asset space and further engage/collaborate with all critical stakeholders, including the CBN, to create a regulatory structure that enhances economic development while promoting a safe, innovative and transparent capital market,” he added.
According to Yuguda, the SEC’s approach is in line with global standards, noting that the US SEC requires platforms that offer to trade in digital asset securities and operate as exchanges to register or seek to be exempted from registration.
“In the United Kingdom, the Financial Conduct Authority (FCA) requires firms that carry on specified activities, by way of business, involving a crypto asset, to be authorized. Crypto assets are viewed as financial products in South Africa and the Financial Sector Conduct Authority (FSCA) requires persons carrying out associated activities to be regulated.
“In Malaysia, operators of digital asset platforms are required to be approved by the Securities Commission (SC) as recognized market operators. Several other securities regulators have taken similar positions”.
“The Chairman of the Joint Committee, Senator Uba Sani said the committee is on a ‘fact finding’ mission in the interest of citizens and the nation’s economy.”