CEO’S OPENING ADDRESS AT THE INAUGURAL SESSION OF THE BOARD OF TRUSTEES OF THE INVESTOR PROTECTION FUND ON SEPTEMBER 21, 2012 AT THE STOCK EXCHANGE HOUSE, MARINA – LAGOS
Good Afternoon Distinguished Ladies and Gentlemen:
It gives me immense pleasure to welcome you to The Nigerian Stock Exchange (“The Exchange”) for this milestone inaugural session of the Board of Trustees (“BoT”) of the Investor Protection Fund (“IPF”).
Today is not a day for long speeches but it is important that I take a moment of our time to underscore why this is an occasion of such significance for The Exchange. With the inauguration of the BoT, we have set in motion an important vehicle for the protection of investors in our market. Henceforth, investors now have a statutorily backed avenue for reducing the losses they suffer as a result of the bankruptcy, insolvency, negligence or wrong doing of our Dealing Members. As investor protection is one of the five (5) pillars upon which our transformation agenda is built, we are very pleased that investors will have this source of succour in applicable circumstances. In conjunction with other initiatives of Management such as investor education, holding investor clinics, revamping our complaints management framework to become more nimble and efficient, as well as implementing our zero tolerance policy for violation of our rules and regulations, we believe that the IPF will further strengthen the confidence of investors in our market.
We have made significant progress with the remaining four (4) pillars of our agenda, namely: (i) targeted business development efforts; (ii) creating a strong regulatory environment; (iii) employing twenty-first century technology strategies; and (iv) implementing a growth enabling market structure. With respect to our business development efforts, we engaged in a thorough review of our Listings Rules, which review led to our revised Listings Rules. Our revised Listed Rules are very robust and contain sufficient incentives to attract a wide range of companies to list on The Exchange. To create a strong regulatory environment, we are currently engaged in a review of all our rules with a view to bringing them in line with international best practice. We are also enforcing our rules firmly but fairly in every situation and providing fulsome information to all stakeholders about the level of compliance of Dealing Members and Listed Companies. To this end, we have the Compliance X Report, which sets forth factual information about Listed Companies’ compliance with our post listing standards and the Broker Track Reports, which provide information about Dealing Members’ infraction history amongst other relevant information. We believe the information in these reports will assist investors to make informed decisions about which companies to invest in and which Dealing Members to engage to assist their investment efforts.
Earlier this week, we launched our market making program, which commenced together with short selling and securities lending. If you have been following the reports about the market, you will see that these market structure initiatives are already bearing fruit and we expect that this trend will continue. We are also leveraging technology at all levels. Many of you are aware that earlier this year, we executed an agreement with NASDAQ OMX for the purchase of a new trading platform. We did a “soft” launch of a new website to provide a modern look and feel and improve service availability. In addition, we have deepened the market by launching an Exchange Traded Fund and are working to launch bond trading shortly. We are energized by the response to all the foregoing initiatives and look forward to taking further steps to ensure that the The Exchange becomes the gateway to African markets.
To the members of the BoT, I must say: you have a weighty task at hand. Each of you is representing a component of the Capital Market. On behalf of the Management of The Exchange I assure you that we will provide you with all the support and assistance that you require within the context of our limited resources. Our expectation is that you will hit the ground running because, as you will agree with us, this session is five (5) years later than it ought to have been, given that the Investment and Securities Act came into force on 25 June 2007. The investing public is watching us and we should give them every comfort to say “it is not how soon but how well.” Therefore, we task the BoT to look for ways to modernize the IPF in line with global best practices, enhance the quantum of funds available in the IPF, and create clear guidelines for compensating legitimate claimants from the fund.
In closing, I would like to express my sincere appreciation to all members of the BoT who have accepted this historic responsibility. Secondly, I would like to express my appreciation to the statutory regulator, the Securities and Exchange Commission for approving our nominees to the BoT as required under the Investment and Securities Act. And, last but not least; I would also like to express my appreciation to all members of the Dealing community represented here today by the representatives of Dealing Members on the Council of The Exchange, the Doyen of the stockbrokers, and the Chairperson of the Association of Stockbroking Houses of Nigeria, ASHON.