SECURITIES AND EXCHANGE COMMISSION (SEC) Lesson Note
Learning Objectives
This SS3 ACCOUNTING lesson note covers SECURITIES AND EXCHANGE COMMISSION (SEC) for First Term, Week 5.
Lesson Note
Learning Objectives
By the end of the lesson, students should be able to:
Narrate the background of SEC.
Enumerate the functions of SEC.
List the registration process in SEC.
Explain the monitoring, investigation and enforcement process of SEC.
A. BACKGROUND OF SEC
The Securities and Exchange Commission (SEC) is the regulatory body responsible for supervising and regulating the Nigerian capital market.
It was first established in 1977 as the Securities and Exchange Commission. It operates under the Investments and Securities Act, which provides the legal framework for regulating the Nigerian capital market.
B. FUNCTIONS OF SEC
The functions of SEC include:
Regulating the Nigerian capital market.
Protecting investors from fraud.
Registering capital market operators and securities.
Monitoring activities in the capital market.
Investigating complaints and suspected offences.
Promoting fair trading practices.
Enforcing capital market laws and regulations.
C. REGISTRATION PROCESS IN SEC
The basic registration process includes:
Obtain the relevant application form.
Complete the application form.
Submit the required documents.
Pay the prescribed registration fees.
Allow SEC to review the application.
Meet the necessary requirements.
Receive approval and registration where the application is successful.
D. MONITORING, INVESTIGATION AND ENFORCEMENT BY SEC
1. Monitoring: SEC supervises capital market activities to ensure that operators follow the rules.
2. Investigation: SEC examines complaints, records and suspected cases of fraud or other violations.
3. Enforcement: SEC takes action against offenders. This may include fines, suspension, cancellation of registration or referral for prosecution, where appropriate.
Evaluation
OBJECTIVE QUESTIONS
SEC stands for ______. A. Securities and Exchange Commission B. Security Economic Council C. Stock Exchange Company D. Securities Enterprise Committee
SEC regulates the ______ market in Nigeria. A. Food B. Capital C. Labour D. Agricultural
SEC was established in ______. A. 1960 B. 1970 C. 1977 D. 1999
One major function of SEC is to ______. A. Manufacture goods B. Protect investors C. Collect school fees D. Employ teachers
SEC registers eligible ______. A. Capital market operators B. Hospital patients C. Schoolchildren D. Farmers only
SEC monitoring helps to ensure that operators ______. A. Ignore regulations B. Follow the rules C. Increase prices unfairly D. Avoid registration
Examining suspected fraud is part of SEC’s ______ function. A. Investigation B. Production C. Advertising D. Transportation
Which of the following is an enforcement action? A. Awarding school certificates B. Suspending an offender’s registration C. Selling farm products D. Building houses
Before registration, an applicant must submit the required ______. A. Documents B. Food items C. School uniforms D. Furniture
SEC promotes fair practices in the ______. A. Capital market B. Sports field C. Classroom D. Hospital
Theory Questions
1a. What is the meaning of SEC?
1b. State two facts about the background of SEC.
2a. Mention five functions of SEC.
2b. List four steps involved in SEC registration.
2c. Explain monitoring, investigation and enforcement.