By David Adonri
For the benefit of those not familiar with the Chartered Institute of Securities and Investment Management (CISIM) Bill awaiting passage by the National Assembly, it is an amendment to replace Chartered Institute of Stockbrokers (CIS) Act 105 of 1992.
Under the current Act, CIS is the sole authority in the capital market with power to train, certify and regulate the professional conduct of practitioners in the business of securities and investments in Nigeria.
To align with this broad mandate, entrench recent reforms of the institute and spread its membership across the capital market, based on popular demand by various associations in the market, CIS initially proposed an amendment of it’s law under the name “Chartered Institute of Securities and Investments (CISI)” but upon discovery that another foreign institute bears that same name, CIS decided to change theirs to CISIM. CISIM is the upgraded version of CISI Bill that the National Assembly (NASS) is yet to pass. Contrary to misconceptions, CISI Bill was not rejected.
CIS trains and certify practitioners to be highly competent and versatile financial and commodity traders, financial and economic analysts and managers, investment bankers, trustees and fund managers. CIS training is academically and technically encompassing. It is spiced with exposure of students to practical demonstration of teachings at security exchanges. Training of members by CIS through the Continuous Professional Development (CPD) programme is a lifelong exercise to update their skills. As a result of their distinctive competencies, CIS members continue to excel at home and abroad.
By virtue of their core competencies, and legal empowerment, CIS members are the core professional practitioners who drive capital market business in Nigeria. Without CIS certification, any person who undertakes functions legally reserved for CIS members in Nigeria’s capital market, is an impostor. The Securities and Exchange Commission (SEC) as the apex regulator of the capital market, does not take kindly to the nefarious activities of impostors.
Contrary to misconceptions, CIS is an independent legal entity established by law of the Federal Republic of Nigeria. It is necessary to correct the erroneous impression contained in recent CFA Society’s vitriolic stand, carried by several newspapers, against passage of CISIM Bill, that the proposed amendment will empower CIS to usurp the regulatory powers of SEC and CBN. This is not correct because each of these regulators have their clearly delineated areas of authority. CISIM does not seek to grab what does not already belong to CIS.
In terms of regulatory power, CISIM Act is not different from current CIS Act which empowers CIS to regulate professional practitioners in the capital market, in areas of securities and investments business in Nigeria. CIS is the only legally constituted securities and investments institute in Nigeria that certify practitioners in the capital market. CFA Society ignorantly stated that SEC and CBN are the only financial market regulators in Nigeria.
The other professionals like Solicitors and Reporting Accountants mentioned in their toxic presentation are not capital market practitioners but professional advisers who belong to different Nigerian professions. They function under their professional authorities that primarily regulate their conduct.
Capital market is organized in an orderly manner. All ancillary service providers must be registered by SEC.
The efforts spearheaded by CIS members, in conjunction with other stakeholders enabled Nigeria’s capital market to progress over the years. CISIM aims at sustaining this progress by strengthening the bonds of oneness and consolidate scattered practices into a formidable virile entity. The Bill seeks to bring all professional practitioners under one umbrella for synergistic reasons. This will put an end to mushrooming of practices and the prevalent low strength of advocacy by market operators. Coming together will create further avenue for versatility and specializations.
Uninformed vitriol, antagonism and misguided opposition by holders of CFA qualification from an American Institute to new reforms anchored by CIS and several Nigerian capital market professional associations to consolidate all their practices into one representative institute, will not truncate this voluntary and laudable agenda.
Various Nigerian capital market associations have voluntarily decided to abandon their fragmentation and consolidate, to be stronger and formidable. Why should impostors, parading uncertified foreign qualifications oppose a move by indigenous organizations, seeking to better organize themselves? Whose interest are they defending? Could it be that of their foreign sponsors who may not mean well for Nigeria?
The aim of CISIM is to reflect various changes arising from reforms in the capital market and its expanded membership base, in its enabling law. CapitalmMarkets are prone to imperfections as a result of vagaries in the economy. This is why reforms are common to maintain the integrity of the market. Reforms usually target vital changes in institutional and legal frameworks, processes and competencies.
Since onset of Nigeria’s capital market, various reforms have enabled it to grow in leaps and bounds. Now, it is one of the best in the world in terms of infrastructure and multiplicity of financial instruments. However, these alone will not guarantee its safety, liquidity and profitability except, human competencies are added. This underscores the repositioning which CISIM seeks to reinforce.
Several past reforms have elevated the training standards and regulatory capacity of CIS thus, promoting it into global recognition. This has earned it affiliation with some of the highly acclaimed international finance institutes. There is cross certification between CIS and these international professional bodies that enable members to practice in their respective jurisdictions, after fulfilling certain conditions.
In line with international best practices, every country allow holders of foreign professional qualifications to practice only after their domestication by a local certification authority. If you are a foreign trained pharmacist or medical doctor, you cannot practice in Nigeria until certified by the Pharmacists Council or Medical Council. This is same for all professional practices including that which falls under CIS.
Nigeria is not a dumping ground for foreign trained persons whose technical and professional competencies cannot be ascertained. If the US does not allow Nigerian pharmacists, medical doctors and CIS members to practice automatically except, after domestication of their qualifications, why should Nigeria give CFA or any other foreign qualification a free ride? This may be behind their bitter opposition to CISIM Bill. By posturing as an equivalent of CIS in Nigeria, CFA Society lacks the legal basis and broadness to compare itself with CIS.
CFA Institute may be prestigious as claimed by CFA Society, but just like other foreign finance institutes which includes CISI and New York Finance Institute, they are not certification authorities in Nigeria. CFA qualification is not a gold or even a bronze standard in Nigeria. They are not in any position to lead the investment profession in Nigeria. Let them go to the country where their institute is domiciled to lead. Nigeria is different from America.
Being a foreign Certified Financial Analyst does not qualify one to feel entitled to practice in Nigeria. The skills required far exceed knowledge of mere financial analysis. Hence, the compulsion to go through CIS recertification process.
CIS training and certification goes beyond what the CFA Society ignorantly described as mere “transacting in securities”. Financial analysis is just one of the competencies of CIS members.
By not understanding that CIS, SEC and CBN have independent powers under the law as regulators, CFA Society made wrong assumptions about the authority of CIS.
The attention of CFA Society is hereby drawn to recent Presidential Executive Order on the promotion of local content in Nigeria. It further empowers indigenous organizations to take control of their country and economy. As a foreign qualification, CFA cannot force its way into contention, except through domestication by CISIM.
CFA claims to promote investors’ rights but CIS promote the rights of all stakeholders in the capital market stoutly and defends Nigerian home grown professionalism and economic stability.
Without prejudice to the right of anybody including CFA Society to bare their feelings on any Bill, it is surprising that their opposition to CISIM Bill is uninformed, misguided and baseless. If they had sought clarifications from their members who are certified by CIS, they would have known that CISIM means well for the finance industry and Nigeria’s economy.
The long delay this Bill has suffered in the National Assembly may continue to evoke misconceptions from stakeholders. Its quick passage is a vital step that will hasten necessary reforms that are long overdue in the capital market.
DAVID ADONRI is Associate Chartered Stockbroker/CEO Highcap Securities Limited