Associations & Practice | |
Associations & Practice | |
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Sunday, October
11, 2020 / 10:27AM / OpEd By CIS / Header Image Credit: Ecographics
Being the response from
the Chartered
Institute of Stockbrokers of Nigeria (CIS), dated Monday October 05, 2020 to
the letter
from The Association of Corporate and Individual Investment Advisers
(CIIA) on observations about the planned Chartered Institute of Securities and
Investment Management (CISIM) Bill.
The Proposed Bill on the
Chartered Institute of Securities & Investment (CISI)
The Chartered Institute of Stockbrokers (CIS) hereby
acknowledges receipt of your letter dated September 21, 2020 on the
above-referenced subject and appreciates the Association of Corporate and
Individual investment Advisers (CIIA) for reaching out to the Institute on the
subject.
However, the CIS noticed from the content of your
letter that the concept and intent of the CISI Bill (now renamed CISIM)
seemed to have been grossly misconceived by the CIIA, and our response below seeks
to clarify the issues raised therein. We do hope the CIIA will carefully
and objectively review our response for a holistic view of the subject.
1. About CIS
CIS
was established by Act 105 of 1992 as a not-for-profit professional institute
providing certification and training for professionals in stockbroking,
securities and investment, fund and portfolio management, asset management,
investment management, and other related fields. It is also responsible for the
regulation and discipline of members of the profession.
The
ACS qualification is a postgraduate qualification, which is widely recognized
for people working in the capital market, financial services industry, fund and
investment management. Our qualification compares favorably with other foreign
qualifications given its rigorous and practice-oriented content and
examination. Holders of the ACS qualification are highly skilled personnel, eminently
qualified by virtue of the qualitative, rich and relevant training they had
undergone before achieving the certification, with many of them presently
occupying lop positions in both the private and public sector of the economy.
The
CIS has a Code of Ethics and Standards of Professional Conduct, which conforms
with international best practices. Members are expected to abide by the Codes
and Standards and exhibit the highest level of ethical behavior and
professional conduct in providing service to their clients, and discharge of
obligation in whatever capacity they operate in the industry.
As
provided by the Act that established it, the Institute has a disciplinary
machinery which promptly attends to complaints on any member and metes out
appropriate sanctions as deemed necessary on proven professional misconduct.
The disciplinary scheme consists of an Investigating Panel and a Disciplinary
Tribunal, which has a legal assessor in attendance at all times. The Rules of
the Tribunal are approved by the Honorable Minister of Justice & Attorney
General of the Federation.
CIS
is a member of the Association of Professional Bodies of Nigeria (APBN), and
Association of Certified International Investment Analysts (ACIIA) based in
Switzerland. Our qualification (ACS) is approved for exemption from the
foundation and National Examination levels of ACIIA like our counterparts in
Europe. Asia and Americas. The affiliation not only affords us the opportunity
to benchmark our qualifications with international standards, it also ensures
that our members could compete favorably with their counterparts in foreign
investment centers. Indeed, some of our members have achieved the CIIA
certification, which is recognition of superior standard of applied common
knowledge that is essential for working in domestic and international
investment markets. Fellows and Associates of the CIS are also eligible for
direct admission as members of the Chartered Institute for Securities and
Investment (UK).
Since
its inception, the Institute has certified over 2500 qualified securities and
investment professionals who are mostly top Managers and Executives in various
organizations in different sectors of the economy including banks, insurance
companies, stockbroking firms, issuing houses, pension fund administrators and
regulatory agencies.
Related: The Chartered Institute
of Securities and Investment Bill 2020
2. The CISIM Bill
The
CISM Bill is a Bill for an Act to repeal the Chartered institute of
Stockbrokers Act, Cap. C9 LFN 2004 and provide for the establishment of the
Chartered Institute of Securities and Investment Management to set standards of
knowledge, ethical conduct & practice, certify, train, discipline and
direct the practice of securities and investment profession and for related
matters.
The following are the rationale for the CISIM Bill:
The
need for a review of the existing structure for training and certification of
professionals in the Nigerian Capital Market, as justified above, in response
to significant changes that have taken place in the Nigerian Capital Market
over the years, is the reason for promoting the CISIM Bill. The CIS considers
this to be an auspicious moment for all stakeholders in the market to work
together. review the structures and processes in the market with a view to
effecting necessary adjustments so that the growth and development of the
Capital Market can be sustained seamlessly as we all desire. It is crucial that
we continue to maintain order in the market to ensure that the progress we have
made over the years is not truncated.
This
quest to drive needed changes for sustained market growth and development is
the norm in progressive markets, and we should not aspire for less in Nigeria.
For instance, in 2015, the South African Institute of Stockbrokers
(SAIS), taking cognizance of evolving challenges in the South African financial
markets took steps to reposition and transform the financial services industry
by proposing major structural changes with education and ap capacity building
at the heart of the process. Ultimately, in May 2015, the scope of operation of
SAIS was widen by legislation to include the total Financial Markets Industry.
In
the UK. the Securities and Investment Institute (SII) was changed to Chartered
Institute of Securities and Investment (CISI) by an act of parliament in 2009,
and is now a leading professional body for securities, investment, wealth and
financial planning professionals. The CISIM has existed alongside the Prudential
Regulatory Authority (PRA) and the Financial Conduct Authority (FCA) without
any problem. in the US, the Financial Industry Regulatory Authority (FINRA)
exists alongside the US Securities and Exchange Commission (SEC). Similarly, in
Nigeria, the CISIM would exist alongside the Securities and Exchange Commission
(SEC), the Central Bank of Nigeria and other regulators with each body having
its clear-cut responsibilities and boundaries.
Editor's Note: The CISI was formed in 1992 as the
Securities and Investment Institute (SII) by the members of the London Stock Exchange. It
changed its name to the Securities and Investment Institute in November
2004. On Friday October 09, 2009, Her Majesty the Queen
signed the Charter formally creating the Chartered
Institute for Securities & Investment (CISI). In November 2015
the Institute of Financial Planning was formally merged into the CISI. In
2017, CISI, the Chartered
Insurance Institute and the Chartered
Institute of Bankers in Scotland formed the Chartered Body Alliance.
It
is worthy of emphasis that the role of CISIM will not in any way conflict with
the role of regulators like the Securities and
Exchange Commission (SEC) and Central
Bank of Nigeria (CBN). As it is applicable globally, a professional
institute sets standards of knowledge to be attained by members of' the
profession, certifies them and promotes the highest level of ethical conduct
and professional behavior among its members. Any members who falls short of the
required standard of conduct and behavior is sanctioned as appropriate by the institute.
It is only in this sense that CISIM will 'regulate' the conduct of its members.
The role of SEC and CBN as the apex regulator of the Capital Market and Money
Market in Nigeria respectively has never been in doubt or contested, and will
not be conflicted by the CISIM Bill.
Further,
in most parts of the world, in professions like Medicine, Engineering,
Accountancy, Law, etc. members are at liberty to specialize and practice in any
given course/areas of their choice, thus giving room for the specialists to
aggregate and articulate their interests as Associations/Trade groups in the
industry but deriving powers from the originating Act of the Parliament. i.e.
Nigerian Medical Council. Council of Registered Engineers in Nigeria (COREN),
the Institute of Chartered Accountants Nigeria, Council of Legal Education.
etc. A similar structure will emerge with the passage of the CISIM Bill.
3. Advocacy Efforts for the CISIM Bill
The
CIS' approach to the CISIM Bill over the years has been to engage key
stakeholders extensively with a view to getting their buy-in and to achieve
greater inclusiveness. However, it is important to reemphasize that CIS is a
creation of the laws of the Federal Republic of Nigeria and the current CIS Act
105 of 1992 already covers implicitly all the areas of securities dealing that
the new CISIM Bill seeks to clearly highlight. For instance, the role of
stockbrokers as investment Advisers in the Nigerian Capital Market has never
been in doubt or contested. Even, the apex regulator. SEC accords stockbrokers
this recognition.
Nevertheless,
the CIS takes cognizance of the dynamic changes that have taken place in the
Nigerian Capital Market over the years has continued to work with all
stakeholders to maintain order in the market. For the avoidance of doubt. we
would like to put on record that the CIS has had series of engagement with the
underlisted groups and continues to be open to further engagement on this
matter.
Specifically, starting from last year (2019) several
meetings of the above-listed CISIM Stakeholders groups were held culminating in
the formation of two sub-committees populated by members of groups and CIS to
discuss and agree respectively on
All the parties were duly represented and contributed
robustly to the discussions resulting in two reports that respectively
presented a Governance Structure and a draft MOU to be signed by the parties.
As you may be aware, four of the organizations have signed the agreed MOU - CIS, AHIN, FMAN and IAPM.
You may have read in the media some objections raised against the
CISIM Bill by the FMDA and CFA
Society, who were engaged in several meetings
as part of the CISIM Stakeholder Group, and whose representatives were involved
in drafting the MOU. A critical appraisal of their argument will show that it
does not hold water.
Given the points highlighted above, and whilst the
Institute remains open for discussions and engagement with any willing party,
the CIS is convinced that the pursuit of the CISIM Bill is a noble course that
should be pursued vigorously. Indeed, the CIS believes that to sustain
development and progress in the Nigerian Capital Market, law and order must
prevail.
We appreciate your good intention and cooperation.
Please accept the assurances of our esteemed regards.
Related to
CIS and the CISIM Bill
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