Int’l Standards-aligned Disclosures Will Lower Capital Costs, Attract Investors – SEC

The Securities and Exchange Commission (SEC) has unveiled plans to thrust the adoption of International Sustainability Standards Board (ISSB) disclosure frameworks successful Nigeria, arsenic this volition fortify marketplace transparency, trim accusation risk, and pull planetary superior flows into the country’s superior markets.

Speaking connected the sidelines of a sheet league connected IFRS S1 and S2 standards, the director-general of the SEC, Dr. Emomotimi Agama, said the committee is committed to positioning Nigeria’s superior marketplace successful enactment with the planetary baseline acceptable by the ISSB, which operates nether the International Financial Reporting Standards (IFRS) Foundation.

He noted that this determination is captious for gathering capitalist confidence, lowering issuers’ outgo of capital, and making Nigerian securities much charismatic to planetary organization investors and improvement concern institutions (DFIs).

Agama explained that, arsenic a subordinate of the International Organisation of Securities Commissions (IOSCO), the SEC has been actively engaged successful planetary argumentation discussions and is portion of the ISSB Standards Adoption Readiness Work Group (ARWG) that developed Nigeria’s roadmap for implementation.
This roadmap outlines a phased attack that begins with voluntary adoption by aboriginal adopters and ample nationalist involvement entities (PIEs) earlier transitioning to mandatory adoption from 2027 for important PIEs, 2028 for different PIEs, and 2030 for tiny and mean enterprises.

According to him, the caller sustainability disclosure authorities is designed to springiness investors transparent, comparable, and decision-useful accusation astir however companies negociate risk, physique currency travel resilience, and execute modulation strategies. Such disclosures, helium stressed, volition assistance little perceived risks, trim borrowing costs, and summation entree to a broader excavation of planetary capital.

Agama besides highlighted the collaborative measures underway to harmonise information reporting expectations among Nigerian investors. Through the Capital Market Master Plan Implementation Council (CAMMIC) and assorted roundtables, the SEC engages pension funds, plus managers, and organization investors to align their information requests with ISSB metrics.

He said this would trim the existent duplication and fragmentation successful environmental, social, and governance (ESG) reporting requirements, which often spot a dense load connected issuers.

“To further fortify reporting quality, the SEC is moving intimately with the Financial Reporting Council of Nigeria (FRCN) connected phased assurance requirements that volition guarantee capitalist assurance portion avoiding excessive costs for companies astatine the aboriginal stages of adoption.

“It is besides collaborating with the Nigerian Exchange Limited (NGX) connected taxonomy-enabled integer reporting systems to alteration machine-readable disclosures and amended capitalist entree to sustainability information,” helium stated.

Agama noted that, arsenic the Nigerian marketplace transitions to these planetary standards, the SEC volition initially follow a review-based supervisory attack and a ‘comply oregon explain’ authorities earlier moving towards afloat enforcement erstwhile preparer and assurance capableness person matured.

He stated that this reflects the regulator’s committedness to balancing marketplace subject with developmental enactment arsenic companies accommodate to the caller requirements.

He emphasised that afloat adoption of the ISSB’s IFRS S1 and S2 standards volition not lone deepen the Nigerian superior marketplace and boost its credibility but besides stimulate merchandise innovation, including greenish bonds, sustainability-linked bonds, and modulation sukuk. These products volition diversify the market’s offerings, heighten liquidity, and amended Nigeria’s eligibility for large planetary indices.

He maintained that embedding sustainability standards into the superior marketplace model volition solidify the SEC’s relation arsenic an enabler of marketplace improvement portion positioning Nigeria arsenic a credible destination for liable concern capital.