=Eight trade groups in the Nigerian capital market have renewed their call on the National Assembly not to pass Chartered Institute of Securities Investment (CISI) Bill of 2013 in its current form, saying that passing the bill in its current form will be an invitation to chaos in the market that is just regaining investors’ confidence after 2008 meltdown.
However, the President of Chartered Institute of Stockbrokers (CIS), Olushekun Ariyo, said rather than create chaos in the market, the establishment of the CISI would bring sanity to the market and avoid the kind of rot that led to crash in 2008.
The bill, which is sponsored by former Chairman of the Senate Committee on Capital Market, Ganiyu Solomon, is expected to establish the CISI that would replace the existing CIS. The bill, which is being handled by the Senate Committee on Capital Market, has gone through some public hearings.
However, eight groups, including: Association of Asset Custodians of Nigeria(AACN); Association of Corporate Trustees(ACT); Association of Investment Advisers and Portfolio Managers(AIAPM), Association of Pension Operators of Nigeria(PENOP); Capital Market Solicitors Association(CMSA); Financial Market Dealers Association(FMDA); Fund Managers Association of Nigeria(FMAN) and Institute of Capital Market Registrars(ICMR), said apart from the fact that inputs were not received from stakeholders on the bill, there were many flaws in it and it should not be passed the way it is.
Speaking on the position of the group, Mr. Taiwo Okeowo of FMAN said, “we feel strongly that there should be certain key amendments to this bill if it will go ahead at all. We need to communicate to the capital market, the three arms of the government and the general populace at large that there are significant flaws in the bill as presently drafted and should not go forward.”
Also speaking, Mr. Segun Sunni of AACN, said while the groups are not against the bill, he explained that if there will be an institute that will combine all the functionalities in the financial market, money and capital market, that institute must be an initiative that has the inputs and contributions of all stakeholders.
“No single trade group can transmute itself into a super regulator of the entire financial market. In this financial market, we have the registrars, custodians, treasurers, financial market dealers, trustees, investment managers, fund managers and pension funds operators. But for the CIS to seek to change its charter to a CISI that will control all activities, it must have the inputs and contributions and fair representation of all stakeholders in terms of its governance, constitution, make up and philosophy,” he said.
Sanni added it is wrong to criminalise operators who are not certified by the proposed CISI as contained in the bill.
He said: “We are not against establishing a CISI. But the key issue is that the fact that it makes us to be members compulsorily without consultations, and criminalising non-membership if you must operate in the market. If we must be members, our recommendation is that CIS should remain CIS, which is a body of brokers, the same were we have others professionals. If we want to form a CISI, let us found it from the scratch, with the governance, the constitution, everything around leadership and council with fair representation among all stakeholders. That is our minimum request which we feel will ensure continued good governance of our market and good health of the market and avoid the chaos that will ensue if this CISI bill is passed the way it is presently constituted.”
Also commenting on the development, Sade Odunaiya of CFA Society of Nigeria said Nigerian market should realise that it is not alone.
“It is in a global environment. Therefore whatever we seek to do in our local market should be something that the global market will see as acceptable and enhancing the standards that will give confidence for investments to flow in. If this bill is passed as currently constituted, we will be sending wrong signals to global investment market and that will be harm to our market that needs these investments in order to grow rapidly,” Odunaiya said.
But Ariyo said the bill is in the interest of the market and noted that consultations are still on-going.
“The bill is a good one and should be encouraged because it would prevent some of the factors that led to the near collapse of the capital market in 2008,” he said.