By BABAJIDE KOMOLAFE
The Nigeria Deposit Insurance Corporation (NDIC) has called for the need for the establishment of an explicit investor protection scheme to protect the interest of small investors in the capital market and to boost public confidence among the investing public.
This call was made by the NDIC Managing Director, Alh. Umaru Ibrahim, yesterday when he hosted the Executive Council of Chartered Institute of Stockbrokers (CIS) who paid him a courtesy call in his office. Alh. Umaru said the creation of an explicit Investor Insurance Scheme is imperative to the development of a stable capital market, adding that the Corporation has been advocating for a framework for the Investor and Small Insurance Policy Holder Protection Schemes in collaboration with the International Association of Deposit Insurers (IADI) study group.
The NDIC Chief Executive also lamented the over-concentration of stock-broking firms in certain parts of the country, which he said did not augur well for financial inclusion. Alhaji Ibrahim therefore advised the institute to mobilise resources for securing licences to spread such opportunities to all the nooks and corners of the country. He further suggested that in line with Agent Banking model by the Central Bank of Nigeria (CBN), the institute could engage the services of some agents in various parts of the country to reach out to small investors.
Alh. Umaru also reiterated the need for partnership with the Institute in capacity building, particularly for the Corporation’s Bank Examiners to acquire more skills in capital market operations which would assist them in conducting consolidated risk-based supervision.
On the proposed amendments of the CIS enabling Act No. 105 of 1992, the NDIC MD/CE assured the Institute of the Corporation’s support. He however, advised that the Institute should reach out to key stakeholders, including the Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN) and other Members of the Financial Services, Regulation Coordinating Committee (FSRCC) in order to avoid misinterpretation and jurisdictional issues. He added that the regulators of the financial services industry would harmonize their positions on the proposed Bill.