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Review AMC Bill, stockbrokers urge FG

By Peter Egwuatu
The approval being sought by the Central Bank of Nigeria, CBN, from the National Assembly  to establish an Asset Management Company, AMC, that would take over the bad loans associated with margin facilities obtained by stockbroking firms, estimated at over N3 trillion, may suffer a set back as stockbrokers under the aegis of  Association of Stockbroking Houses of Nigeria, ASHON, are opposing some of the contents because it favours only the banks and not the entire financial system.

Also, in apparent determination to curb infractions in the Nigerian capital market, ASHON said it has applied to the Securities and Exchange Commission, SEC, to become a Self Regulatory Organisation, SRO.

Stockbrokers, who spoke with Vanguard, yesterday affirmed that there are lapses and omission of some recommendations from the stockbrokers in the contents of the proposed Assets Management Company Bill now before the National Assembly for consideration. “There is a disconnect between what the Central Bank of Nigeria stated and what the consultants are implementing” ASHON added.

To that extent, ASHON said, “We are going to protest to National Assembly to amend the content so that it could be a reflection of  a national programme aimed at improving the economy.”

According to the Chairman, ASHON, Alhaji R.O Yusuff, “AMC should be made a national policy where its key purpose is to improve the economy and not assist banks alone to improve their capital and liquidity positions by taking troubled assets (qualifying loans) from the banks.”

We are kicking against the proposed entity because the apex bank did not make wide consultation before submitting the AMC bill to the National Assembly. What we are seeing is different from what the CBN Govornor, Lamido Sanusi told us at the stakeholders meeting. So the consultants is not putting it right.”

The bill on the AMC expected to buy up the toxic assets of banks that are causing liquidity problem in the financial system has already been submitted to the Presidency for onward delivery to the National Assembly.

The AMC is expected to have N250 billion capital, to be owned 60 per cent by the CBN and 40 per cent by the Federal Ministry of Finance.

Mr. Madubuike Emeka, Managing Director/CEO, Compass Investment Securities Limited, in his reaction said the contents of the bill are skewed in favour of the banks.

According to him, “ When we got the information that the bill was not all encompassing, we have decided to approach National Assembly to amend the content.

But it will be unfair if the CBN sends the bill without our inputs. The AMC was an idea that we suggested to the former CBN governor, (Prof. Chukwuma Soludo) when the financial crisis started. But he did not take any action on it,”

Continuing, he said, “Both the money and capital markets are inter-related. The major challenge is the toxic assets created from the margin loans. We have suggested how this can be tackled through the AMC. But if the CBN did not capture our suggestions in the bill, it will be unfortunate.”

On the issue of ASHON becoming an SRO, Yussuff said, “We want to become SRO to enable us monitor our members and hence curb or reduce infractions in the market. We have pledged to the regulators that we are going to abide by the rules of the game to ensure confidence is returned to the market.

We want SEC to delegates some of its responsibilities to us so that we can be able to make sure that mal practices are curbed or drastically reduced. We intend to work with SEC and Nigerian Stock Exchange (NSE) to review some of the rules that have become obsolete.”


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.