It was recently reported that a bill to repeal and replace the Act establishing Chartered Institute of Stockbrokers (CIS) effectively transmuting her to Chartered Institute of Securities and Investment Management (CISIM) is before the National Assembly again. Ordinarily, this would not have elicited concerns and may even have been applauded as the Institute, like any other, has a right to re-position her members. However, this proposed CISIM bill appears similar to the CISI bill that CIS tried unsuccessfully to enact through the 7th Assembly in 2013 and that is a cause for concern for the Capital Markets, Investment Industry, and practitioners therein.
The proposed CISIM bill’s explanatory memorandum signals the intention of CIS “to regulate and control the professional practice in the areas of Securities and Investments business in Nigeria.” CIS reportedly claimed the CISIM bill is to bring professionals practicing in securities and investment business in Nigeria under one umbrella for ease of regulation, an objective that is neither desirable nor within her purview. Apparently, the proposed CISIM would be empowered to force all practitioners of Securities and Investment business in Nigeria to be her members, be the sole credentialing body, able to jail or fine otherwise qualified non-member practitioners, etc.
The powers to regulate practitioners in the Financial Markets sometimes overlap and lie principally with the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) which registers Capital Market Operators who engage in Securities and Investment business in Nigeria and cannot be usurped by a private entity. Registered practitioners in the Capital Markets have diverse functions with specialized skillsets that exceed merely transacting in securities, belong to different credentialing bodies and/or Self-Regulating Organisations. Apart from brokers, others include solicitors, reporting accountants, rating agencies, registrars, custodians, trustees, financial market dealers, asset managers, investment advisers etc. whose members cannot be regulated and certified by the proposed CISIM but by SEC and their respective professional bodies.
The progress being recorded in the Financial Markets as spearheaded by the regulators and other stakeholders could be reversed if the proposed CISIM bill that failed to pass the 7th Assembly is left standing in its present form. It is likely to discourage discerning investors (foreign and local) from participating in the markets, stifle specializations and a plurality of functions and perspectives needed to foster further development of the market, and further inhibit efficient operations of the markets, all of which are against the values that CFA Society Nigeria and other concerned industry stakeholders stand for.
CFA Society Nigeria is a member society of the CFA Institute, the body that awards the prestigious CFA charter which is considered the gold standard globally in the investment profession. Currently, there are over 178,000 CFA charter-holders globally in over 151 countries that belong to 157 member societies across the globe. Our members work across various sectors of the Nigerian economy, particularly in the Financial Services Industry, and also belong to several SROS and trade groups in the Nigeria Capital Market. The Society’s mission is “to lead the investment profession by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society”. The Society’s advocacy efforts are aimed at ensuring market integrity through fair markets, trustworthy industry, ethical profession, and educated investors. She promotes investors’ rights and education and believes strongly that the long-term sustainability of the markets depends on their working for the ultimate benefit of investors.