Wednesday, October 26, 2016 03.40 PM / TheAnalyst / Taiwo Ologbon-Ori
NSE on Monday, October 24, 2016 made a quantum leap of faith that crossed the border-line of NEUTRALITY by promoting a listed product over other listed products of same status on the bourse.
It could have gone un-noticed or under the radar but for the commitment and vigilance of TheAnalyst to market integrity.
The exchange, on Monday issued out a series of tweets (hereunder displayed via a screen-grab) promoting the VETIVA S&P Nigerian Sovereign Bond ETF product; which, all things considered, appears both unethical and unfair to the spirit and intent of a self-regulated market designed to serve all listed entities on the bourse.
In switching roles intermittently from being a market platform, market umpire to a market promotion entity, something is lost about the independence and neutrality of the bourse.
There is an argument to be made about the need for its sales and listing unit to promote active entities on the bourse as a pull-factor for more improved listing. This however has to be done bearing in mind the concept of neutrality that underpins the work of the exchange.
There is no doubt that at a critical time like this, the NSE has to showcase its most potent and viable issues; yet there cannot and must not be a case for moving away from the very clear role of an Exchange that is basically constructed to encourage companies to capitalize by selling securities of the listed entity to the investing public to create investment opportunities for both small and large investors to participate in the growth of small and large companies.
That the stock exchange also helps government in raising huge funds for capital and development projects is an undeniable fact which must not under any guise, confer on the exchange the right to pick winners and losers in the bourse.
This is wrong and it must be stopped and never occur again.
The exchange is expected to act in the very best public/market interest and ensure the maintenance of a fair and orderly market setting.
As a self-regulated market operatoir/regulator; the NSE is not expected to switch to a biased position and promote an issuer or product(s).
It is our considered opinion that this action is wrong, unfair, partial and unethical; a matter bothering on the application and discharge of its fiduciary responsibility vis-a-vis the reputation of the issuer.
The code of conduct guiding best practice in this regard is rather clear, unambiguous and not subject to interpretation of this nature, a subject bothering on investor protection, public/market interest and corporate governance practice.
Whereas it is a fact that Vetival S&P Nigerian Sovereign Bond ETF may be first of its kind, but it is not the first and the only ETF product on the bourse. To single-out the product and its issuer for promotion and endorsement by the market arbiter/regulator makes it inequitable, which threatens or may erode the principle of equity and fairness in the market.
We are very clear that by Standard practice, we expect NSE to maintain the highest standard of integrity, fairness and professionalism in the discharge of its duties.
We therefore call on the NSE to clarify its position with the series of tweets from its official and verified handle (which by the way is one too many - @NSEContact and @NSENigeria) which seeks to promote and endorse Vetival S&P Nigerian Sovereign Bond Index, issued by Vetival Fund Managers Limited.
1. Vetiva S&P Nigerian Sovereign Bond ETF