The Nigerian capital market regulation

Abstract

The capital market is a vital instrument of economic growth. It is a market where capital funds (equity and debt) are traded. Thus, it offers corporate business organizations and government the forum and means to raise long-term funds at a cheaper cost than that of the money market. The Nigerian Capital Market is an important market in Africa, second only to the South African market in terms of sophistication and market capitalization. Government and self-regulatory organizations regulate the capital market because of its importance to the economic growth of the country. The regulation seeks to ensure that the market is fair, efficient and transparent to such an extent as to adequately protect investors and the economy, the latter from the systemic effect of market failure. This article presents an overview of the Nigerian Capital Market and its regulatory structure. It defines a capital market and discusses the functions of a capital market, as well as the objectives for the establishment of the Nigerian Capital Market. It traces the evolution of the capital market as well as its regulation, and evaluates the current structure for regulating the market and for selling disputes among market participants. In conclusion, it offers suggestions for a more effective regulation of the market, so as to enable it cope with new challenges.