Two major operators in the Nigerian Capital Market on Wednesday faulted the proposed bill for an act to repeal the Chartered Institute of Stock Brokers( CIS ) and establish the Chartered Institute of Securities and Investment (CISI).
The Head, Corporate Service Division, Nigeria Stock Exchange (NSE), Mr Bola Adeeko, in a presentation at a public hearing on the bill organised by the Senate Committee on Capital Market, said the bill should be restructured.
Adeeko said that the proposed bill was drafted without due consultation and collaboration with other major capital market stakeholders that fell under the jurisdiction of the bill.
According to Adeeko,” these stakeholders play a major role in the securities and investment markets and cannot be compelled into participating in an association without due consultation.
“These stakeholders include Issuing Houses, Fund and Portfolio Managers, Trustees, Financial Advisers, Financial Analysts, Treasurers, Bond Dealers.
“They have to be adequately carried along for the bill to achieve the purpose”.
He said that the provision on the governing council of the bill excluded the Nigerian Stock Exchange as a member of the council.
Adeeko said the bill provided for one representative each of the licensed securities exchanges in Nigeria.
He said this was contrary to the current composition of the governing council under the 2004 Act.
The NSE representative, however, acknowledged that the bill would foster greater collaboration and proactive engagement with regulators, trade bodies, financial service firms and expert advisers.
On his part, Mr Munir Gwarzo, the Executive Commissioner (Operation), Securities and Exchange Commission (SEC), said there was the need for all the stakeholders to be carried along.
“We believe from what we have seen in the Nigerian Capital Market in the last 10 to 15 years that with CIS certifying brokers, we can clearly see a lot of value being added.
“Therefore, if such certification is extended to other operators in the market, it is our opinion that we will be able to get the best out of it.”
Declaring the public hearing open, the Senate President, Sen.David Mark said there was the need for a diversified economy lamenting that Nigeria’s economy was mono-cultural.
Mark, who was represented by the Senate Leader Sen. Victor Ndoma-Egba (PDP-Cross River), said the Capital Market was key to ensuring this diversification.
“Our economy is currently mono-cultural, single product dependent economy and it shouldn’t be so.
“We have the resources, both material and human, to transform our economy from its mono cultural nature to a diversified one and we can do this only through the stock market. “
According to him, “the capital market is critical to the transformation of the economy and if it is so then the operators of the sector must be properly regulated and legally provided for. “
Earlier, the Chairman, Senate Committee on Capital Market, Sen. Ayo Adeseun (APC-Oyo), said that the development of the Capital Market was essential as it would facilitate the diversification of the economy from its dependence on oil.
“The nation’s economy is over-dependent on the oil sector.
“The sector contributes over 80 per cent of the nation’s revenue and 90 per cent of its exports.
“This has exposed our country to economic crisis which impact negatively on government finances in particular and the economy as a whole.”
Adeseun said there was a need to collectively resolve to ensure that the Nigerian Capital Market became a veritable instrument for the transformation of the economy.
The bill , which is sponsored by Sen. Ganiyu Solomon (APC-Lagos), seeks to among other things, effect a name change from the Chartered Institute of Stockbrokers to the Chartered Institute of Securities and Investment.
It also seeks to expand the scope of the current regulation, and bring in more capital market operators under one umbrella body that would train and certify capital market professionals