In bid to boost liquidity, the Capital market operators on Sunday called on the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) to grant them single dealing license to access discount window.
Mr Sonnie Ayere, the Group Managing Director, Dunn Loren Merrifield, stated this at the annual workshop of the Capital Market Association of Nigeria (CAMCAN) in Lagos.
Ayere said that issuance of single dealing license would boost liquidity of the operators and facilitate a more robust and deeper financial market.
The operators are currently being regulated by the Securities and Exchange Commission and they are cut out of the Primary Auction Market for Treasury Bills.
He stated that the reform would provide a much stronger platform for market based financial intermediation to thrive, ensure that they were well capitalised and regulated.
Ayere, who is also the President of Association of Issuing Houses of Nigeria, said that issuance of a combined Capital Market Dealing license would reduce the numbers of licenses being issued.
He said that the CBN should not focus only on commercial banks, saying that the combined capital base of issuing houses, stockbroking firms was not up to the capital base of a smallest bank in the country.
Ms. Kaodi Ugoji, the Vice President and Divisional Head, Corporate Planning, who spoke on the same topic, noted that the country had been affected by illiquidity, lack of regulatory framework and high focus on risk free securities.
Ugoji added that because of illiquidity in the market companies were borrowing short term funds to finance long term projects.
She said that there was the need to introduce measures to enlarge the domestic institutional investors base, particularly through pension sector reforms.
According to her, the importance of a strong and viable domestic capital market as an alternative source of finance in emerging economies has been affirmed by the success it has enjoyed in countries such as Brazil, Malaysia, Russia, India and China.
Ugoji said that Nigeria must implement some of these initiatives in order to further deepen its capital markets for economic growth.