SEC Director-General Emomotimi Agama believes there is a need for sensible regulation of fintech in Nigeria.
In a significant move to protect investors and maintain market integrity, the Nigerian Securities and Exchange Commission (SEC) has announced a crackdown on fraud in the fintech sector in the country.
To achieve this, the SEC plans to enforce “smart regulation” across the fintech ecosystem to reduce mismanagement of funds and ensure operators comply with existing laws. .
The SEC Director-General, Mr. Emomotimi Agama, conveyed this message in his keynote address on “Positioning Africa’s FinTech Ecosystem to Accelerate Inclusive Growth” held recently at Nigeria FinTech Week. Ta.
While recognizing the potential of fintech to transform Africa’s financial landscape, Mr. Agama warned of the significant risks it poses.
“We cannot afford to let this growing sector go unchecked. Large amounts of investment data can be misused without consent, and companies are increasingly raising public funds without proper regulatory controls. ” he said.
Agama added: “The time has come for fintech operators to comply with capital market rules when it comes to financing.”
He clarified that private limited companies raising funds must cooperate with the SEC, while privately raised companies must comply with the law.
To balance regulatory oversight and innovation, the SEC is promoting a smart regulatory regime that tailors existing capital laws to the unique needs of fintech operators.
Mr Agama explained: “This is a regulation tailored to the products that exist. Regulations are often laid bare without considering the characteristics of the product.
“Smart regulation takes into account the characteristics of those products and introduces regulations that adapt to them, because one hat does not fit all.”
He said smart regulation must be flexible and strict, fostering innovation while maintaining security, consumer protection and market integrity standards. Mr. Agama also outlined the SEC’s three-pronged approach to fintech regulation, which focuses on regulatory compliance, stakeholder trust, and investor validation.
“Our regulatory framework is designed to ensure that innovative solutions meet the necessary standards of security and consumer protection, while promoting sustainable growth of the market,” he added.
As part of its mission to increase awareness and help new and existing fintech companies navigate the regulatory environment, the SEC established an innovation and fintech portal called FinPort.
Agama said FinPort was established to help fintech companies understand regulatory demands and requirements related to capital markets.
He said there are currently more than 200 fintech companies operating in the country, a space often staffed by tech-savvy entrepreneurs, and a wide range of financial institutions, particularly with regard to regulation. It was inferred that there may be a lack of knowledge.
“Today’s SEC is a friendly and welcoming institution, fully aware that many of the people involved in fintech are young and inexperienced,” he said.
Mr. Agama emphasized the importance of a regulatory framework for safe and profitable fintech innovation, noting that the SEC is conscious of striking the right regulatory balance. “Effective regulation creates an environment that fosters innovation while protecting investors,” he said.
