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DFID, FCA to collaborate with SEC on Fintech

The Department for International Development (DFID), Financial Conduct Authority (FCA) and the Securities and Exchange Commission (SEC) have agreed to collaborate in developing the FinTech space in Nigeria.

Speaking when she received officials of both organisations in Abuja weekend, the acting Director General of SEC, Ms. Mary Uduk, said SEC was enthusiastic about the collaboration as it would encourage responsible use of new technologies and digital finance in the capital market, influence increased international participation and cooperation, and also provide investors with more choices in the Nigerian Capital Market.

SEC, she said, is looking to adopt regulatory and supervisory practices for orderly development and stability of FinTech, as the commission will pay close attention to sustaining confidence and safeguarding the integrity of the market.

In a statement issued by the commission, Sunday Uduk was quoted as saying: “In this way, our policies will facilitate the safe entry of new products, activities and intermediaries. In addition, we will ensure that regulation does not stand in the way of innovation.”

According to her, while it is clear that FinTech has already made huge inroads into many aspects of the financial industry, what is perhaps even clearer is that the surface has barely been scratched in relation to what FinTech can do in the future.

“The awareness of customers that their data might be prone to cyber attacks could make them lose trust in digital channels until strong consumer protection frameworks are in place. These frameworks for digital financial services will be critical in building confidence for consumers.

“We have come up with ways to monitor the risks that may come up. It’s like a sandbox, but not an enclave. We are building capacity to train young people that would be able to drive the process. We hope that this year will be a turning point. We are trying to gather as much information as we can to be able to contextualise and synthesise regulation in Nigeria.

“Young people are beginning to get interested in investment and they are doing this via FinTech and that is why we are doing all that we can to develop rules around it so that the risk will be mitigated and it will further develop the market,” she explained.

In his remarks, the Senior Adviser, UK DFID, Mr Richard Sandall, said DFID and FCA have a partnership to support FCA to step into new jurisdictions to deliver DFID objectives in certain areas.

He said: “We are in Nigeria to look at the FinTech environment, regulatory environment and see if there are ways the FinTech environment can be built.

“We are very interested in the impacts that FinTechs in Nigeria would have in the UK. We know that Nigeria has FintTechs and the FCA has already established international networks.”

The agreement with FCA, he noted, is for up to two years during which time modalities would be put in place to work with regulators, adding that that was why SEC became part of the arrangement.

Also speaking, Nigeria Lead, FCA, Mr Parma Bains, said they have done some work with the SEC in the past and are very comfortable working with the commission.

 Bains expressed appreciation to SEC for the opportunity to collaborate and expressed the belief that it is the beginning of many collaborative relationships that would span the next two years of the project.

On her part, the Technical Specialist, FCA, Alicia Kedzierski, said she was impressed by the depth the research has taken, the fact that it has gone to various jurisdictions to try to find out what is happening is a good step.

The idea behind the UK-Africa Fintech partnership, she said, is to connect African entrepreneurs with British FinTech investors and business mentors to access the finance and the advice needed to start and grow their companies.

She stated that the UK’s Financial Conduct Authority (FCA) will work with its regulatory counterparts in Africa, a dedicated fund worth up to £2 million will support Nigerian start-ups

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