The Securities and Exchange Commission (SEC) has proposed some guidelines that will allow capital market operators and investors to digitize all of their processes.
The requirements are contained in the Minimum Operating Standards for Information Technology for capital market operators recently exposed to the public, released by the SEC.
The commission argued that rules establishing basic market operating criteria were essential due to the increasing reliance of financial services and related companies on technology.
What the SEC is saying
SEC said the guidelines would establish a threshold for operational efficiency in the market through effective adoption of Information Technology (IT) in driving businesses to ensure security, confidentiality, integrity and reliability of information systems.
The SEC said, ”This will help operators harness the huge benefits derivable from the adoption of technology and also manage the attendant cyber-security threats and other risks that accompany the use of technology.”
”It will also positively impact on the effectiveness and efficiency of the Commission to monitor and regulate all capital market operators in the market,” the SEC added.
The Commission stated that the document’s requirements would apply to all types of CMOs, else in places where specific kinds of operators were mentioned.
Key takeaway from the SEC guideline
- Any or a mix of Client-Server, Cloud, Distributed, or Time-Sharing computing environments may be used. The computing environment must be well-suited to the Capital Market Operator’s activities and business objectives (CMO).
- To ensure service availability and continuity, hardware systems and all other IT equipment in the environment must be housed in physical premises with proper security, access control, power, and cooling.
- The servers must run Microsoft Windows Server 2016 or an equivalent UNIX/Linux and comparable server operating system. All operating system versions in use must be licensed, activated, and fully supported by OEMs in terms of receiving security updates and patches on a regular basis.
- All installed software applications must be licensed and compatible with these operating system minimum versions. The server hardware must meet the minimum requirements for installing Microsoft Windows Server 2016 or equivalent UNIX/Linux and related server operating systems.
- All IT/IS functions must be staffed by skilled and competent individuals who have verified certification, suitable education, or relevant experience. IT/IS management function handlers must have a minimum of a BSc/HND or the equivalent. IT/IS personnel must be sufficiently trained to keep up with the fast-paced changes and evolutions that characterize the technology industry.
- All exchanges must offer secure trading platforms that incorporate real-time quotations, charting tools, news feeds, deal monitoring, and premium research, among other features. All exchanges must have a surveillance system that monitors all trade operations in real time.
General Secretary for SEC please it up and make sure the companies handling the affected companies during the clean up of banks work. Firstfund has been left without any help passing it on from one bank to another just to chop small. OctaneDC which is supposed to handle Firstfund is just there with telling f stories. Please of some monies are thee to be disbursed let’s have it because we are dying slowly. Thank you.
The problem with SEC and NGX is primarily lack of understanding of capital market issues. Perhaps operators are not telling them. The market is not sophisticated enough to superimpose an heavy structure upon it. In local parlance, we say the market requires keke NAPEP engine but you want operators to adopt Rolls Royce engines. It compounds the problem. Right now, the whole talk is on the uptrend in the market. However, the question by Analysts are is the uptrend sustainable? How many companies are contributing to the uptrend? Why is the market so imperfect? What is the numerical strength of the so called domestic investors compared to the national population?
For free let me opined that the real issues are not with traders but with Registrars. There is serious inefficiencies at the Registrars and CSCS Plc. Registrars are Lagos-based but stock market is countrywide. Investors are outside Lagos are in dire need of Registrar and CSCS services. Why would investors be made to pay to open trading accounts at CSCS?. Surely, Registrars insistence on investors appearance in Lagos office is a negation of capital market investing. This is where SEC should concentrate its digitalizing strategy. Why would an investor based in Kano travel to Lagos to claim N10,000? This is the cause of the ever rising unclaimed dividend and there is no end in sight in so far as SEC and Registrars are not willing to do the proper arrangement.
As for the growth we see in the stock market now, the third quarter is very bleak unless actions are taken to improve investors liquidity. Profit taking and weak company performances would soak away the uptrend we see now.