BACKGROUND OF THE STUDY

The importance of a capital market as a catalyst of economic growth and development through its ability to mobilize surplus funds for investment purposes has long been realized. It is not surprising. Therefore those countries all over the world strive to build a solid capital market with a verity of financial instruments and dynamic instrument capable of enhancing the “National wealth”. A capital market exists to assist in the transfer of found from the “excess” units (saver) to the deficit units (investment decision makers) various types of institution traditionally play one role or another in the process of transfer of found. These include the stock exchange, issuing house, stock brokers share registers, share distribution agent (e.g. merchant banks, insurance companies pension found e.t.c.). The Nigeria enterprise promotion boards and the Nigeria security and exchange commission (SFC) although of these institution perform one function on the other in the transferring process; they are not locate in one place. The capital market may therefore be defined as the complex of institutions and mechanizing through which intermediate term funds and long term fund are posted out standing are transferred (Doug all / Governments 1975). The two regulatory bodies in Nigeria are the securities exchange (NSE). It is important to distinguish the two at this point. While the security exchange commission (NSC) is a statutory body of the apex of the capital market, the Nigeria stock exchange (NSE) is a self regulatory organization (SRO) under the supervision of the security exchange commission but with delegated power to ensure smooth operation of the market. The exchange provides facilities for trading on secondary securities thus creating liquidity and ensuring easy transfer of securities in the market. It also makes rules and regulation to guide the professional conduct of its member.