The Securities and Exchange Commission has urged commodities exchanges in the country to give priority to investor protection and attract more investment into the capital market.
Director General of the SEC, Lamido Yuguda gave the charge during the presentation of Eko Gold Coins to the Management of the commission by the Lagos Futures and Commodities Exchange at the weekend.
Specifically, Yuguda urged the LCFE and the entire value chain to always have investor protection at the core mandate to boost their confidence and participation in the products.
“Gold has a great value, once you buy it, you have incontrovertible value, but where we need to be careful is the associated investment product, the derivatives products.
“The derivatives products are built around the product itself. We must have investor protection at heart. Investors should have confidence that anytime they want to sell this product, they are likely to get more than they put in which is the true meaning of investment.”
The SEC DG pointed out that investment is about postponing current consumption for the future, noting that investors must get some returns as a price for that postponement of current consumption.
According to him, “So when you sell this product in the future and make a gain, you are being rewarded, but when you sell the product in the future and you make a loss, you are making two losses.
“One you are postponing current consumption and two you have not recovered your principal in the future. When people do that, as it happened in the stock market in 2008, you find out that the investor confidence wanes.”
Yuguda commended the LCFE on the demonstration and presentation and assured them of the commission’s support in the development of the product and in the efforts to enlighten both the market participants and the investors who will put in their money.
“I wish you all the best in this market and whatever the SEC can do to support the development of this gold market we will do. This is an important consideration because this is something that has a dual use. You can use gold as a store of value, i.e monetary gold or as jewelry.”
“It is my greatest honour and elation to present the first tranche of this exclusive gold coin which is available for purchase at LCFE to you and your esteemed team at the commission.”
Ezeagu disclosed that the Exchange wishes to propagate the information about this novel achievement market-wide, with the adequate assistance and support of the SEC so that ‘together we will build a thriving and enduring commodities ecosystem in Nigeria.’
