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Conflict resolution in the capital market: Where to go


In the first part of this article,we established that conflict is part of human life, and it occurs in every human activity. The most important thing is that there are laid down rules or procedures to ensure that whenever they occur, conflicts are quickly resolved. In the capital market, conflicts also occur, between operators and investors, and amongst operators. However, to sustain and enhance investors’ confidence, such conflict must be resolve promptly.

Conflict in the market can be resolved; it is only that most times, the aggrieved parties (shareholders) do not have enough information or are completely ignorant on how to go about settling the issues affecting them.

It is for this reason that Association of Stockbroking Houses of Nigeria, ASHON, the umbrella body of stockbroking houses in Nigeria, is working on a Complaint Management Framework that will ensure quick resolution of conflicts. Though, it is yet to be published, the framework would be structured in such a way that aggrieved investor(s) would not be lost as to what to expect at each stage of a conflict management.

The framework provides that first of all, an aggrieved investor will register his complaints through a written notice to the firm concerned, be it a stockbroking house, registrar or any other operator, complaining about infraction or malpractice committed against him/her.

On receipt of such letter, the company is expected to officially respond to the complaint via an ‘Acknowledgement Letter’ within two working days. A copy of the letter is also expected to be forwarded to the trade group depending on the area the firm operates, to keep everybody abreast of happening in the market. The complaint at this stage is expected to be resolved within 10 days.

If at the end of 10days, the firm fails to resolve the conflict or the investor still feels dissatisfied, he (investor) is free to report that matter to the appropriate Trade Group. This could be ASHON, Chartered Institute of Stockbrokers, CIS, Institute of Capital Market Registrars, ICMR, or any other trade group in the capital market. At this stage, the complaint has 20 days within which it must be resolved.

Unsatisfied with the agreement reached here, the investor is required at this stage to escalate the complaint to the Self Regulatory Organisation, this time, the Nigerian Stock Exchange, NSE. The NSE, on its part, is expected to look into the grievance/objections raised by the investor and tackle that within 20 working days.

Where the NSE fails to amicably resolve the conflict, then it will be taken to the Securities and Exchange Commission, SEC. SEC also has 20 days within which it is expected to settle the matter.


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