HISTORICAL DEVELOPMENT, REGULATION AND SANITIZATION OF NIGERIA’S CAPITAL MARKET

The study examined the e˙ects of the historical development and regulation of Nigeria’s capital market on its sanitization and performance. Accordingly, the normative and positiveforms of theory of regu-lation were adopted with a qualitative research methodology. The preliminary findings of the study suggest that, the two principal regulatory instruments of the Nigerian capital market are the Securities and Exchange Commission (SEC) as its apex institutional framework, and Investment and Securities Act (ISA), 2007 as its legal framework.It was, however, found that, regulatory failure has been respon-sible for adverse performance of the Nigeria capital market over the years. It was also found that, the performance of Nigeria’s capital market has been negatively a˙ected by the global financial crisis of 2007 to 2011, and that, this was heightened by the economic recession that bedevilled the country shortly after the inauguration of the present administration in 2015. It was, therefore, concluded that, historical development and regulation of the Nigerian capital market have not influenced its sanitiza-tion and favourable performance. The study recommended, among other things, that, the selection of oycials of the Securities and Exchange Commission should be based on integrity, merit and credibility, and not on political grounds, party loyalty, sentiments, vested interests, nepotism, favouritism and federal character principle. Also, the leadership of the Nigerian Securities and Exchange Commission should maintain their integrity and uprightness in order to e˙ectively run the a˙airs of the Commis-sion and to enforce its rules and the provisions of the Investment and Securities Act. Furthermore, loopholes in the legal system of the Nigerian capital market should be blocked to a reasonable degree; and there should be a rigorous review of the Investment and Securities Act (ISA) to reflect the dictates of corporate governance for listed companies. Not only that, appropriate sanctions should be given to culprits in order to serve as a deterrent. As such, any case of insider abuse and violation of Nigeria Stock Exchange (NSE) rules should be duly prosecuted. Finally, the Nigerian Stock Exchange should dilute the extent of foreign capital in its market capitalization so as to reduce its vulnerability to external shocks.