Capital markets 170 560. The capital market provides an avenue for those with money to invest in the stocks of listed companies, the debt instruments of firms and the government in return for dividends and/or shares in these entities. It is concerned with medium to long-term funding needs (usually for expansion, modernisation and capital development) in both the private and public sectors. Capital may be raised either through primary markets (for new issues of shares or bonds), or secondary markets (for trading in existing shares). 561. The Nigerian capital market has experienced considerable growth in recent years. There were 288 listed companies in 2006. A total of 36,700 million shares were traded for N468,600 million. The market capitalisation realised N5,120 billion – a 277 per cent increase over 2003. 562. Trading facilities were upgraded recently to meet international standards. Upgrades included introducing the Central Securities Clearing System. This handled the clearing, settlement and delivery of transactions on the exchange electronically. Other upgrades included introducing automatic trading to replace the manual system, thereby reducing transaction and settlement times. An electronic platform for real-time online trading was also introduced. These innovations allow investors to speculate more, to take advantage of capital appreciation, and to reduce the costs associated with producing and transferring stock certificates. 563. The Investment and Securities Act (1999) increased the regulatory functions of the SEC. They now include licensing and regulating new stock exchanges, licensing and regulating the establishment of new commodity exchanges, and registering all market operators. The Investment and Securities Tribunal (IST) was established in 2002 to adjudicate all matters involving stakeholders in the market. These include protecting the interests of investors, transparency, fairness, responsiveness and resolving disputes flexibly. These innovations engendered confidence in the capital market. 564. However, the CRM found that, despite the phenomenal growth in recent times, problems remain. These include inadequate instruments, lack of capacity, unethical and unprofessional conduct, and high transaction costs in the market. Stakeholders also cited lack of transparency as a major and recurring problem. Some registrars, for example, were blamed for delays in verifying signatures and dispatching dividend warrants to shareholders. Issuing houses were also blamed for issuing documents poorly. This led to delays in processing applications. 565. With regard to capacity, most stakeholders felt that, until recently, the training of stockbrokers was limited to being present on the trading floor and taking one written and a few oral tests. Agents received no training and tended to behave unethically. Apart from buying and selling shares on behalf of their clients, stockbrokers failed to offer good service and were accused of unethical and unprofessional conduct. 566. The capital market is thought to be uncompetitive, inefficient and unprofessionally run. It lacks diversity in trading instruments, is not