By Babajide Komolafe

THERE is a prevalence of poor attitude to customers’ complaints in the capital market. The experience of many investors in this regard is reflected in the email received from Investor Oyekunle, published in the last edition.

File photo: The floor of Stock exchange

The Complaint Management Framework for the Capital Market issued by Securities and Exchange Commission (SEC) is supposed to address this poor attitude.  The framework may however not be efficient in achieving this purpose.  This is because the framework has some gaps, which can easily be exploited by operators in the market.

The first issue is the inherent latitude of the framework. The way the framework is designed and its language is devoid of any sense of urgency and compulsion. It conveys the impression that complaints resolution is something that operators should do when they don’t have anything to do again.

For example, while the circular directs operators  to establish complaint management policies, it does not specify a deadline for them to do so. This gap becomes more apparent when the provision in the SEC’s framework is compared with the directive given by Central Bank of Nigeria to banks and discount houses on Customers Complaints in 2011.

According to SEC, “All Capital Market Operators and listed Public Companies shall be required to establish a clearly defined Complaints Management policy to handle and resolve complaints from their clients. The framework shall deal with complaints against operators by clients or other operators, shareholders/public companies and investors. The policy should be defined and endorsed by the company’s/firm’s senior management, who should also be responsible for its implementation and for monitoring compliance.

Companies/firms shall provide information on complaints and complaints-handling to the relevant Competent Authority on a quarterly basis.

Financial institutions

This data should cover the number and nature of  complaints received and should be differentiated according to their various criteria.”

The CBN said, “All financial institutions must submit monthly returns on all customer complaints received (whether resolved or not) to the CBN starting from 31st October, 2011.”

While the CBN directive conveys sense of urgency, that of SEC does not. The CBN circular was issued on August 16th 2011, but it specified when financial institutions must start sending monthly return on customers complaint, hence allowing two and half months for setting up of the customers’ complaint desk. This is not so in the case of the SEC.  Furthermore is the fact that while the apex bank stipulated that returns on customers’ complaint must be sent every month, in the case of SEC it is every quarter (three months).

Capital market operators have a notorious negative attitude to customers’ complaint. They don’t like to hear or receive complaints, hence they would rather dodge or ignore a complaint or dribble the investor except if he/she is influential.

Hence asking them to set up complaint management policy or process without articulating deadline would be ineffective. The three months also allowed for rendition of returns also amounts to indulgence on the part of SEC and implies weak commitment to getting operators attend to customers’ complaint.

The Commission should realise that three months is too long for investors to suffer, before it knows that an operator is or nor addressing their complaints. (Please send comments, suggestions to vanguardinvestorsforum@

gmail.com)