INSTITUTIONS IN THE NIGERIAN CAPITAL MARKET

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The Nigerian capital market is where long-term financial instruments are traded. 

The Securities and Exchange Commission (SEC), the Nigerian Stock Exchange (NSE), stockbrokers, and the Central Bank of Nigeria (CBN) are all involved in the Nigerian capital market.

Let's take a closer look at each one of them

The Nigerian Securities and exchange commission (SEC)

This is the apex regulatory agency of the Nigerian capital market.

It was established by the Securities and Exchange Commission Act of September 27, 1979, which was re-enacted by the Securities and Exchange Commission Decree of 1988.

It was previously known as the Capital Issues Committee (1962-1972) and the Capital Issue Commission (1973-1979) respectively. 

Its main objective is to promote an orderly and efficient capital market in Nigeria by creating a conducive environment for savings and borrowings, both of which are necessary for economic development.

It is crucial to note, however, that the SEC, unlike the CBN, does not participate in the capital market as a buyer or seller of securities.

The Nigerian Exchange Group/Nigeria Stock Exchange(NSE)

The Nigeria Stock Exchange is mostly a secondary market for existing or second-hand stocks.

The Nigerian stock exchange started as the Lagos Stock exchange, which was established by the Lagos stock exchange Act of 1961.

However, in 1977, the Lagos stock exchange was renamed the Nigerian Stock exchange.

The Nigerian Stock Exchange was entirely demutualized in 2021, transitioning from a member-owned non-profit to a shareholder-owned, profit-making organization.

As a result, the Nigeria Stock exchange was renamed the Nigerian Exchange Group (NGX group).

Central Bank of Nigeria (CBN)

The CBN is the apex banking institution in Nigeria that has the responsibility of regulating the activities of key players in the country's financial market.

Along with the securities and exchange commission (SEC), It is responsible for regulating the Nigerian capital market and ensuring that the operations of market institutions are consistent with the government's monetary policy.

It also serves as a last-resort market maker, assisting in the provision of much-needed liquidity in the Nigerian stock market.

In addition, the Central Bank of Nigeria sells government securities on the stock exchange. 

It trades development stocks, FGN bonds, and other government securities on behalf of the federal government of Nigeria.

Stockbrokers

To buy and sell stocks in the Nigerian capital market, one must go through a stockbroker.

A stockbroker is a person or organization that makes a profit by buying and selling stocks for its clients. 

In most cases, stockbrokers execute trading orders on behalf of their clients.

Meristem Registrar Limited, BGL Limited, Afrinvest Securities Limited, Capital Asset Limited, and others are common stockbrokers in the Nigerian stock market.

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