In April 2022, shareholders in Nigeria’s capital market, represented by the Issuers and Investors Alternative Dispute Resolution Initiative (IIADRI), voiced strong opposition to sharp increases in fees imposed把手 by the Securities and Exchange Commission (SEC). The group labeled the hikes as “astronomical” and “punitive,” warning that they could stifle growth not only in the capital market but also in the broader economy, which was already grappling with challenging conditions.
Drastic Fee Increases Spark Outrage
The IIADRI, in a statement titled “Outrageous increase in fees charged by the Securities and Exchange Commission,” signed by Chairman Moses Igbrude and Secretary Sebastian Udoh, highlighted specific fee hikes that have caused widespread concern. The filing fees for proxy materials surged from N50,000 to N500,000, a tenfold increase. Similarly, the registration fee for brokers jumped from N500,000 to N5 million, and fees for underwriters and issuing houses saw comparable increases.
These sharp adjustments, according to IIADRI, were implemented without due consideration of Nigeria’s economic challenges, including low economic indicators and inadequate infrastructure. The group argued that such hikes could deter investment and hinder companies’ ability to operate profitably.
Economic Implications and Investor Concerns
The IIADRI emphasized that the fee increases threaten the growth of the Nigerian capital market and the wider economy. With many companies struggling to break even amid inflationary pressures and other economic difficulties, the additional financial burden could discourage market participation and weaken investor confidence. The statement described the SEC’s actions as “inconsiderate” and “repressive,” arguing that they could suppress economic activity at a critical time.
The organization, dedicated to protecting companies and investors, condemned the “arbitrary and unilateral” nature of the fee hikes. They urged the SEC to reverse the increases to support the interests of shareholders and Nigerian companies facing financial strain.
Call for Reversal and Dialogue
The IIADRI’s statement called for the SEC to revert to the previous fee structure to foster a more conducive environment for businesses and investors. The group stressed the need for policies that support growth rather than impose additional costs, especially given the economic challenges facing Nigeria in 2022.
The controversy highlights broader tensions between regulatory bodies and market participants, as stakeholders seek a balance between oversight and economic viability. The IIADRI’s push for dialogue with the SEC underscores the importance of collaborative policymaking to ensure the capital market remains a driver of economic progress.
Protecting the Capital Market’s Future
The outcry over the SEC’s fee increases reflects growing concerns about the sustainability of Nigeria’s capital market. The IIADRI’s advocacy for a reversal of the hikes aims to safeguard the interests of investors and companies, promoting a market environment that encourages growth and stability. As Nigeria navigates economic headwinds, the resolution of this issue will be critical to maintaining investor trust and supporting corporate profitability.
