By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The Nigerian Stock Exchange said it has presented a memorandum to the Senate Committee on Capital Markets to replace the Chartered Institute of Stockbrokers (CIS) Act 2004 with the Chartered Institute of Securities and Investment Bill 2013 (CISI).
The NSE said the objective of memorandum is to enable the senate make informed decision that would positively affect capital market stakeholders at a critical time in the recovery of the capital markets.
According to the NSE, apart from replacing the CIS Act 2004 with the CISI bill 2013, the new bill seeks to modernize and broaden the scope of operations of the Institute to include Securities and Investments which otherwise is restricted to traditional stockbroking activities or buying and selling of stocks.
The NSE affirmed that the principal objectives of the Bill include the following; to advance the theory and practice of Securities Dealing and Investment Management and Advisory, determining the standard of knowledge and skill to be attained by persons seeking to engage in, and practice in the Securities and Investment business and profession respectively in Nigeria to become registered members of the Institute and to raise those standards from time to time as circumstances may permit.
Other objectives of the CISI Bill 2013 is conducting professional examinations leading to the award of certificates, diplomas and other awards as may be prescribed by the Institute, maintaining discipline within the profession and to do all such things as may advance the profession of securities and investment.
The NSE said the CISI Bill has its benefits as it would foster greater collaborative and proactive engagement with regulators, trade bodies, financial services firms, academic institutions and expert advisers.
According to the NSE, some of the advantages the Bill seeks to achieve include Global Best Practices.
ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œThe Bill is in line with the practice in other leading jurisdictions for example, the United Kingdom, South Africa and United States of America,ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â the NSE said.
The NigeriaÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s Exchange further affirmed that in the UK, the Chartered Institute for Securities & Investment (CISI) is the largest and most widely respected professional body for professionals in the securities and investment industry in that region and in a growing number of financial centers globally.
ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œThis is the model that the proposed CISI Bill 2013 intends to adopt,ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â the NSE said.
Another best practice jurisdiction is South Africa with the South African Institute of Security (SAIS) established in Johannesburg in 1978 and itÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s responsible for drawing up the original training standards for the securities industry.
ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œThe aim is to promote individual professional competence and to support the maintenance and enhancement of this competence by securities professionals. This model is also similar to the proposals in the CISI Bill,ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â the NSE said.
While in the US, there is the Financial Industry Regulatory Authority (FINRA), a private corporation that acts as a self-regulatory organization (SRO). FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD).
The Nigeria Exchange said ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œFINRA is a non-governmental organization that performs financial regulation of member brokerage firms and exchange markets.
It also regulates the activities of professionals in the securities markets as well as administers the certification for participating in the US financial marketsÃƒÂ¢Ã¢â€šÂ¬Ã‚Â.
The NSE affirmed the CISI Bill seeks to adhere to international standards as illustrated in capital market activities in other jurisdictions. It will ensure that the Nigerian capital market meets up to the set benchmark and remains one of the leading financial centres in the African region in line with the transformation of the Nigerian Capital Market and wider economy.
ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œIt will also ensure a higher degree of professionalism in the financial services industry and encourage members to maintain and develop their knowledge and skills to promote higher standards of ethics and integrity in the securities and investment industryÃƒÂ¢Ã¢â€šÂ¬Ã‚Â the NSE affirmed.
Besides international best practice, CISI bill 2013 will also improve broader participation and from the foregoing, the need for a broader version of the Institute of Stockbrokers is imperative as it allows for broader participation of other players in the capital market.
ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œThe Nigerian capital market has evolved beyond buying and selling of stocks and now includes fixed income trading, Exchange Traded Funds and other securities.
As part of the effort to deepen and develop the Nigerian capital market, other financial instruments will be introduced to the market imminently which will require participation from other financial services professionals.
For example, Treasury Bond Dealers in the Over-the-Counter (OTC) market amongst other securities. The current CIS structure has become redundant as it is restricted to only stockbrokers and does not accommodate other financial market professionals,ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â the NSE affirmed.