Don't Miss


Home   >   Market - Finance   >   NSE picks holes in CISI Bill

NSE picks holes in CISI Bill

By on October 5, 2013

The Nigerian Stock Exchange, NSE, has listed areas of concern in the proposed Institute of Securities and Investment, CISI Bill, currently before the National Assembly, saying that the Bill in its current state is not adequately defined and articulated.

NSE noted that while the objectives were well intended, from an operational perspective, it wasimpractical to extend the scope of the CIS without adequately the concerns.

The CISI Bill seeks to replace the law that set up the Chattered Institute of Stockbrokers, CIS, as well as bring other trade groups in the capital market under the supervision of CISI. The Bill is being sponsored by the former Chairman of the Senate Committee on Capital Market, Mr. Solomon Ganiyu.

In a draft memorandum to the Senate Committee on Capital Market, the NSE stressed among other things the need to clearly define the scope of power of the new Bill, saying that if at all, such powers should be restricted to professional standards and ethical conducts.

According to the NSE, the Bill was drafted without due consultation and collaboration with other major stakeholders that fall under the jurisdiction of the Bill.

“These stakeholders play a major role in the securities and investment markets and cannot be compelled into participating in an association without due consultation and collaboration. These stakeholders include Issuing Houses, Fund and Portfolio Managers, Trustees, Financial Advisers, Financial Analysts, Treasurers, Bond Dealers, Foreign Exchange Dealers, Custodians, Private Equity Managers, Venture Capitalists amongst others. These stakeholders have to be adequately consulted and carried along for the Bill to achieve the purpose of improving broader participation.” The NSE said.

It further stated that the provision for the governing council, which  The Nigerian Stock Exchange as a member of The Council, runs contrary to the current composition of the Governing Council, where the NSE is permanently represented as the foremost Securities Exchange in the Nigerian Capital Market.

“As stated earlier, there are several other capital market professionals that operate in the Nigerian capital market outside of the stockbroking community. The CISI Bill would need to state the professionals that fall under its jurisdiction.

“Furthermore, the Bill grants the CISI disciplinary powers to sanction individuals who hold themselves out to be capital market professionals but are not members of the CISI.The offence is punishable by monetary fines ranging from five hundred thousand naira to five million naira and six months imprisonment. This can only be achieved after due consultation and collaboration with the other capital market stakeholders taking into consideration the fact there are numerous other trade groups and associations that already exist.

“The CISI Bill also introduces corporate memberships from organisations that meet their prescribed conditions. These conditions include satisfying the CISI Council that the organizations are fit and proper in conducting business in the securities and investment space. However, this could potentially duplicate and conflict with the regulatory oversight functions of the Securities and Exchange Commission and the Nigerian Stock Exchange as the Apex regulator and front line Self-Regulatory Organisation in the Nigerian capital market,” the NSE added.

It will be recalled that several trade groups in the market had kicked against the Bill, calling on the Senate Committee to quash it.

 

 

 

[Vanguard]