August 23, 2020

CISI Bill risky for financial market operations, economy – FMDA

Coping with Sobowale’s expired ideas

By Peter Egwuatu


The Financial Market Dealers Association of Nigeria (FMDA) has kicked against move by the Chartered Institute of Stockbrokers (CIS) and four other professional bodies to float the Chartered Institute of Securities and Investment of Nigeria (CISI) to control and regulate financial market operations in Nigeria.


The FMDA,  created to develop financial market infrastructure, human capital and promote professional and ethical standards in treasury activities in Nigeria, distances itself and its members from the activities of the CISI Bill sponsors, which was created to destabilize the financial market and economy by assigning illegal powers to the CISI.


Other Institute’s listed in the new move to create CISI include Institute of Capital Market Registrars (ICMR), the Fund Managers Association of Nigeria (FMAN), the Association of Issuing Houses of Nigeria (ASHON) and Association of Investment Advisers and Portfolio Managers (AIPM).

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FMDA Secretary Mrs. Mary Gbegbaje, says the CISI Bill seeks to repeal the current Chartered Institute of the Stockbrokers Act and be replaced with the Chartered Institute of Securities and Investment (CISI) Act, with the principal objective of determining standards of practice in the securities and investment business.


She noted the concerns the financial publics have about the intention and purpose of the Bill, adding that FMDA will not accede to signing the MoU from the Chartered Institute of Stock Brokers to distort and weaken securities and investment activities in the Nigerian Capital Market.


FMDA has through her Governing Council informed CIS that the Treasury Management Certificate is issued by the Chartered Institute of Bankers of Nigeria (CIBN) to qualified candidates and remains the minimum requirement as stipulated by the Central Bank of Nigeria’s Competency Framework Document for anyone to be in the Treasury Department of any Bank in Nigeria.


In a statement, FMDA says “Ordinarily, if the coverage of the proposed Bill is limited to the activities of Stockbrokers, we would not have been concerned; however, the bill seeks to cover every aspect of Securities and Investment, including the thriving Fixed Income OTC markets which was nurtured by financial markets stakeholders”.


FMDA kicked against CIS’s intent to regulate all other Trade groups & Associations that are engaged in capital market activities. The Bill also makes it illegal for individuals and Corporation to practice without the membership of the Institute.


It raised issues concerning the dissolution of the Chartered Institute of Stockbrokers, definition of Securities and Investment Professionals, Election, Tenure and Qualification of the President and Vice Presidents of the Institute and Composition of the Governing Council of the CISI.


FMDA says it made some suggestions years back on areas requiring amendments after receiving legal opinion, guidance and counsel from Legal Firm, Banwo & Ighodalo.


The CISI Bill was first sponsored by Senator Ganiyu Solomon(May 2007 to May 2011) for the Chartered Institute of Stockbrokers (CIS) is now before the National Assembly awaiting passage.


The FMDA had in march 2013, written to the Senate Committee on Capital Markets, imploring  that the Bill be stepped down highlighting several threats it will have on financial system stability.


The current CISI Bill is being sponsored by the Chairman, House Committee on Capital Market, Honourable Babangida Ibrahim, and seeks to replace the CIS Act 105 of 1992 that set up the Chartered Institute of Stockbrokers.


The FMDA insisted that it will not be part of a move to polarize the financial market it has nurtured for decades and still building; declining to accede to the request of signing the MOU.


FMDA added: The ambition for omnibus and sweeping powers to regulate all activities of the Nigerian Financial Market space at this time is unlikely to be in the best interest of our economy since we have different agencies of government (Central Bank of Nigeria, Securities and Exchange Commission and Debt Management Office) saddled with the responsibility of regulating different activities covering all spectrum of our financial markets.


The FMDA and the Chartered Institute of Bankers of Nigeria have been in collaboration for twenty-six years and still counting working closely with the Association towards examination and certification of Treasury staff – front, middle and back offices with TMC examination (Treasury Management Certification) formerly Treasury Dealership Certificate (TDC).