The federal government has at last granted approval to the Investments and Securities Tribunal (IST) to access funding from transaction fees paid in the capital market.
The government's directive conveying the approval and addressed to the Director-General of the Securities and Exchange Commission (SEC), Ms. Arunma Oteh, showed that the tribunal would henceforth get 10 per cent from the one per cent of the secondary market transaction fees previously enjoyed by the SEC, Nigerian Stock Exchange (NSE) and the Central Securities Clearing System (CSCS).
The IST had faced acute funding problems since it came into existence due to the failure of the SEC which midwived its set-up anlong with the Budget Office of the Federation to address its needs. The tribunal is a specialised court with exclusive jurisdiction to hear all capital market cases within 90 days.
But unlike the National Industrial Court (NIC) which is funded adequately by the judiciary or the Tax Appeal Tribunal backed by the Federal Inland Revenue Services, the IST was left without financial resources.
Also, the enabling law, the repealed Investments and Securities Act 1999, as well as the current Investments and Securities Act 2007, ranks the chairman and other members of the tribunal at par with the Chief Judge and other judges of the Federal High Court while the emoluments and conditions of service of the staff are rated similar to the other capital market institutions.
These were implemented because of lack of funding.
SEC sources quoted the Permanent Secretary, Federal Ministry of Finance, Mrs. A. M. Daniel-Nwaobia, as saying in the letter that the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, had granted the approval based on the need to redress the “precarious funding position of the Tribunal which has impacted negatively on its operations and the need to find a sustainable solution to it.
“You may also wish to recall that a committee earlier constituted on improving the financial position of IST made the same recommendation in 2012’, she stated, adding that, “with the positive outlook of the Nigerian economy and expected listing of more companies in the market it has become imperative to strengthen all agencies in the industry to optimally perform their statutory responsibilities.
“Improved funding of IST will enable it play its critical and strategic adjudicatory role and equally boost investors’ confidence in the capital market,” the Permanent Secretary stated.
The SEC Director-General was directed to convene a stakeholder meeting of relevant parties to immediately work out modalities of implementing the approval of the Coordinating Minister for the Economy and Minister of Finance.
Capital market industry sources said the life-line is coming at a time the tribunal appears unable to even fund its court sittings or pay for its rented offices in Abuja, Lagos, Kano and Enugu zones.
Moreover, the minister made sure that the approval would not lead to any marginal increase in the transaction fees paid by investors in the market.