The Director-General of the Securities and Exchange Commission, Lamido Yuguda has said that the commission has not fully understood how financial technology firms operates as there are uncertainties in regulating the firms.
Yuguda said this at the “NGX Technovation Conference” with the theme, ‘Technology, Platform and Markets’.
He said financial service provision has moved from conventional banks to the domain of non-conventional actors, adding that those in the tech sector should understand the market.
According to him, the Covid-19 pandemic has forced the commission to stretch possibilities and adapt to new ways of performing regular day to day activities.
He said, “This shift clearly poses a challenge and a huge opportunity to both financial sector regulators and conventional financial service providers like the NGX.
“The shift challenges operators to up- skill and restructure their business models in order to remain relevant while opening up new product channels offerings that were not in existence a few years ago.”
He said global regulators have struggled to keep up with the challenges in the trends in tech led markets.
Yuguda said, “For regulators globally, keeping up with the rapid pace of change in technology led markets is challenging and the rapid pace of innovation has also challenged existing regulatory frameworks, approaches and tools.
“As Fintechs handle both finance and service sectors, there is additional uncertainty around whether and how to regulate these firms.”
But he said regulators have responded with their innovations and initiative to ensure Fintechs strengthen their regulatory policy objectives.
He said this would mitigate negative impact on users and the system at large.
The SEC DG said, “The commission and other regulators around the world are prepared to advance with this evolving pace. It has put mechanisms in place to understand this new innovation, build the required capacity and has deployed strategies to address them.
“The commission’s innovation objective, which is hinged on investor protection, market deepening and providing solutions to existing problems will guide market regulations.”
The SEC boss said a number of the guidelines it has drafted reflect how open the regulator is to innovation.