Financial System Strategy 2020 FSS 2020 FSS 2020

Financial System Strategy 2020 (FSS 2020) FSS 2020 Transformational Programs and Initiatives Updates A PRESENTATION TO 2016 Q 2 CAPITAL MARKET COMMITTEE MEETING (CMC) BY: M. D. SULEYMAN DIRECTOR FSS 2020

Outline • • FSS 2020: Vision, Mission and Strategic Objectives Initiatives that Support FM Activities FSS 2020 Half Year Update of Activities Propose Bills to deepen Financial System FSS 2020 Strategic Alignment with SEC Measures and Enablers that support CAMMP Opportunities for Improve Collaboration Across Sectors Next Steps Slide 2

FSS 2020 Vision, Mission and Strategic Objectives • Vision: By 2020, to be the safest and most diversified financial system among emerging market, supporting the real economy Mission: To drive rapid and sustainable economic growth primarily in Nigeria and Africa. The Strategic Objectives • Strengthen and deepen the domestic market • Enhance integration with external financial markets • Promote sustainable economic development. Slide 3

Initiatives that Support Financial Market Activities • • • Deepening and diversify products, services and institution to drive the increased participation in FM Facilitate the reduction of operational and transaction cost Establish international competitive market infrastructure Ensure the competitiveness of the financial market product and services Support the integration of FM across West Africa Work with Government on fiscal and structural policy as a foundation for long term stability of the financial system Work with the Government to put an incentive structure for large companies to list on NSE Facilitate the listing of small and medium enterprises Work with the Government in operationalizing the commodities exchange market

FSS 2020 HALF YEAR UPDATE OF ACTIVITIES S/NO ACTIVITIES STATUS 1. Capacity Building Program across the industry to support the strategy implementation plan DONE 2. Improve Engagement with FSS 2020 implementing institutions to deepen collaboration ON-GOING 3. FSS 2020 support for promotion of factoring trade finance solution to African Trade ON-GOING 4. Proposal for new and review of existing financial system enabling laws to strengthen the financial sector ON-GOING 5. Development of Strategy Implementation Plan and Validation of Structure of the Secretariat AWAITING APPROVAL 6. Commencement of strategy implementation roadmap to enhance service delivery and track performance across sectors COMMENCED 7. Conducted MSME Survey for the development of a 5 Community-Based Credit Model to identify. Slidevalue chain WORK-IN PROGRESS FSS 2020 Strategy Execution Framework and Programme Management

Proposed Bills to Deepen Financial System • Formulation and drafting of a bill on Secured Transactions in Movable Asset for the creation of a National Collateral Registry. Bill submitted to FEC through the FMo. J for onward submission to NASS • Payment system management bill approved by FEC • The following bills: Securitization and Asset Backed Securities; Warehouse Receipt; Mortgage Institutions and Allied Matters; Mortgage Bank Amendment and SMEDAN are presently being reviewed with other legal teams drawn from all implementing institutions under the FSS 2020 Platform • A draft framework for the Nigerian Factoring Bill is being developed in collaboration with other critical stakeholders • Ongoing effort to get Presidential Accent to the following bills: NIFC; Financial Ombudsman and Electronic Transaction • Attempt being made to represent to the 8 th NASS the Alternative Dispute Resolution Commission Bill 6

FSS 2020 STRATEGY ALIGHNMENT WITH SEC Transformation al Program Description Program support the Objectives Benefits of the Program Owner Institutio n TP 7. Long Term Financing Product Development Long Term (LT) Financing Product development programme designed to identify and develop Asset Backed Securities (ABS) products, instruments and securities for long term financing of infrastructures. These include utility, infrastructure and sukuk bonds and MBS, securitisation. Product structured to enable Pension and Insurance funds investment FM 1. Deepen and diversify products, services and institutions to drive the increased participation in FM FM 1, FM 3, FM 4 and P 1 • Deepen and diversify existing products in the market SEC Develop a framework, appropriate structure and products for commodities, to make Nigeria a point of reference for commodities FM 9. Work with the government in operationalizing the commodities exchange market • Increased activity in strategic sectors • A major driver of the economic transformation • Price stability of commodities • Broader Market with the creation of trading instruments for commodities (including spot, forward, WRS, OTC and futures. ) • Diversification of the economy TP 11. Framework and structure for commodities The passage of the legal framework for warehouse receipts (WRS) and privatisation of the Abuja Commodity Exchange • Close infrastructure financing deficit • Attract capital for infrastructure projects NCX, SEC Slide 7

FSS 2020 STRATEGY ALIGHNMENT WITH SEC Transformational program Description Program Support the Objectives Benefit of Owner the Program Institution TP 12. Advocacy & Incentives to Expand Capital Market Listing Advocacy to influence fiscal and structural policies for longterm stability of the financial system to drive listing of both large companies and SMEs. FM 6. Work with the Government on fiscal and structural policy as the foundation for long term stability of the financial system. FM 7 and FM 8 • Increased SEC activity in strategic sectors • A major driver of the economic transformation • Improve collaboration and coordination Slide 8

Measures and Enablers that Support the Capital Market Master Plan • • • Penetration of financial services to promote financial inclusion Facilitate the reduction of transaction and operational costs for increased participation in the capital market and ease listing of small and medium enterprises Establish international competitive market through moderation of ratio of domestic to foreign fund in the financial market Ensure competitiveness of financial market products and services through the establishment of NIFC Work with Government in operationalization of Commodity Exchange Market Enablers § § § Human capital development and attract expertise to Nigeria Improve legal and regulatory frame work Drive active communication, advocacy and public relations

Opportunity for Improved Collaboration Across Sectors • Ease of collaboration with the key implementing institutions to improve attractiveness of the financial system and impact on the FSS 2020 initiatives. • Platform for engagement with the financial sector regulatory institutions and NASS for the pursuit of relevant bills that would transform the sector • To promote capacity building across the industry as a support base to close identified skill gaps in the financial service industry. • Promote synergy with the key institutions and other critical stakeholders to achieve good mileage in the provision of financial products required to deepen the financial market. • Alignment of FSS 2020 initiatives with the Capital Market Master Plan to enhance integration and promote sustainable economic development. Slide 10

NEXT STEPS • The need for high level engagement of all implementing institutions and stakeholders to drive the reform program • The Implementing Institutions to provide regular monthly/quaterly updates for ease of coordination and alignment of initiatives to enhance and promote efficiency in the financial sector • The implementing institutions to replicate PMO offices that would report on the FSS 2020 initiatives impacting on their institutions • The institutions to nominate technical staff to report on the FSS 2020 initiatives and serve as liaison officers • The need for budgetary provision by implementing institutions to fund the activities of FSS 2020 Secretariat 11

NEXT STEPS CONTD • The Secretariat to put in place a Performance reporting process as part of the need to track progress, ensure monitoring and reporting on performance • Ensure regular and high level quarterly or bi-annual meeting of stakeholders to review progress on the implementation of strategies • To collaborate in the pursuit of relevant bills at the NASS • Improve collaboration amongst stakeholders to deepen the bond market and the development of derivatives

THANK YOU 13