The Nation Newspaper

Tag: CIS

  • CIS urges NSE to review data licensing policy

    CIS urges NSE to review data licensing policy

    Stockbrokers have urged the Nigerian Stock Exchange (NSE) to reconsider its decision to impose fees on brokers and other professional users and distributors of the Exchange’s data in the interest of the development of the capital market.

    But NSE defended its action, saying the proposed fee is the normal practice for global stock exchanges.

    President, Chartered Institute of Stockbrokers (CIS), Mr Ariyo Olushekun, who spoke on behalf of his colleagues, said the proposed fees was counter-productive to efforts by brokers and other operators to improve investors’ education and widen awareness and participation in the Nigerian capital market.

    He outlined that the NSE needs to reconsider the decision against the background of several reasons including the nascent nature and low level of participation in the Nigerian capital market, the nature of operations of stockbrokers, which thrive on investors’ education, the primary and basic nature of these data and the public availability of such data.

    According to him, with less than five per cent of Nigeria’s estimated 170 million population participating in the capital market, there is need to encourage massive information dissemination rather than restricting dissemination of even basic data such as price and trading data.

    He noted that the information the NSE wanted to charge for are basic public information, which newspapers give out, pointing out that if the data licensing policy was based on specialised services such as live streaming of data and linking of website to NSE’s website, it would have been understandable.

    “The move is counter-productive, people need information; basic information about share prices and transactions. Why do we want to blackout ourselves? The NSE should encourage brokers to give out these figures to encourage investors rather than impeding flow of information,” Olushekun said.

    The CIS chief pointed out that the NSE is the main beneficiary of the information dissemination and marketing efforts of brokers as the Exchange has specific charges on all transactions, which brokers had incurred to initiate, market and conclude their transactions.

    He said that operators and regulators should avoid bickering that could undermine the recovery of the market, urging all stakeholders to work together to support the development of the market.

    “This move will drive investors away from the market. What has happened since the announcement of this licensing policy is that brokers have stopped sending market reports to investors. We are urging them to rescind this decision,” Olushekun said.

    He reiterated the supports of stockbrokers as the main body of operators in the stock market for all genuine efforts to develop the capital market.

    Meanwhile, the Exchange has said that the proposed fee would be used to cover some of the huge cost incurred in generating, storing and disseminating the data, which incidentally is also a key element of their intellectual property rights.

    The NSE stated that market data sales account for a sizeable portion of the income of many global Exchanges. It said: “We have however, offered a discounted fee for our broker/dealer firms and the domestic professional end of the market, to facilitate improved access and priced the service competitively in comparison to other Stock Exchanges. We have also taken steps to ensure that the retail end of the market can continue to access some of the key market data information at no cost via our web and electronic mail services using the above links.”

    The Exchange, in a statement by its management reassured the investing community and wider market stakeholders of its commitment to the provision of quality and timely market data access to them and will continue to take steps to ensure that this commitment is maintained at all times.

    It noted that its market dada is a strong proponent of prolific data access, accurate and timely dissemination to the investing community and wider stakeholders of the market. Besides, the NSE said its data facilitates market transparency, better investment decision making and improved access to the capital market.

    The NSE pointed out that in the light of its commitment to timely information; it had initiated several initiatives to provide free access to data for the market stakeholders including provision of a near real-time ticker on its website and provision of a number of end of day and historical data on the Exchange’s website.

    “In order to further the objectives of providing a quality and timely market data dissemination service, the Exchange took direct control of its Market Data business in October 2012 from EDS and some of our market data vendors, which include reputable global market data distributors such as Reuters, Bloomberg, SIX Telekurs, DirectFN, Interactive Data and I-NET Bridge, it noted.

    All these initiatives according to the Exchange, have improved service levels.

    For the professional end of the market, index creators and data distributors, the norm is according to the Exchange is for them to pay for data access and any subsequent distribution to support their professional use. Data distributors it explained, cover any organisation (including broker/dealer firms) receiving The Exchange’s data and forwarding these to other market stakeholders for both professional and non-professional use.

     

  • Market abuses: Investors Protection Fund may not be enough

    The Investors Protection Fund (IPF) may not be able to cover all cases of market abuses and fraudulent practices against investors given the size and frequency of market infractions and the fund.

    President, Chartered Institute of Stockbrokers (CIS), Mr Ariyo Olushekun, said it appeared the IPF might not be enough to protect investors on a sustainable basis because the incidence of market abuses and fraudulent malpractices in the past has overwhelmed the existing fund available.

    According to him, the challenge before the new board of trustees of the IPF is to manage and grow the fund in a way to meet its objectives.

    The IPF was established to compensate investors with genuine claims of pecuniary losses against dealing members of the Nigerian Stock Exchange (NSE) due to insolvency, bankruptcy, negligence of a dealing member firm and abuses committed by directors, officers, employees or representatives in relation to securities, money or any property entrusted to or received by the broker in the course of its business as a capital market operators.

    IPF has about N625 million with a first generation bank. Mr Gamaliel Onosode chairs the nine-man board of IPF, which includes the Managing Director of the Nigerian Stock Exchange (NSE), Oscar Onyema; Misan Kofi-Senaya, managing director of Central Securities Clearing System (CSCS), Mr Kyari Bukar, Chief Sola Abodurin, Fubara Anga, Edosa Kennedy Aigbekaen, Sam Onukwe and Umaru Modibo.

    Olushekun, who spoke at the SEC Journalists’Academy in Abuja, said the best most effective way to protect investors is to institute and enforce proactive measures that enhance market integrity and forestall abuses.

    “The importance of effective regulation in the capital market cannot be overemphasized. Regulations must be designed to address current market realities and by this, they must be up-to-date and relevant. The importance of regulation and enforcement of rules is paramount in investors protection and in gaining investors confidence,” Olushekun said.

    He outlined that certification, continuous training and effective disciplinary measures of the CIS have proved to be major contributors to protection of investors as stockbrokers are usually wary of infringing on codes of ethics and professional guidelines set by CIS.

    According to him, stockbrokers help to protect investors from vagaries of the market and possible abuses by giving quality investment advice that takes into consideration investor’s investment objective, the risk-return profile of investment opportunities and the capacity of the investor to undertake the risk.

    He noted that the CIS plays central roles in ensuring that brokers have adequate knowledge and skills as well as keep to market rules and regulations.

    He pointed out CIS’s code of ethics and standards of professional conduct ensure that stockbrokers at all times give priority to the interest of the investors and the capital market.

    According to him, CIS’s code of ethics and standards of professional conduct ensure fair dealing with existing and potential clients, preservation of client’s confidentiality, fiduciary duties, and general responsibilities to clients and the market.

    “All of these cannot be achieved without discipline. CIS has an effective adjudicating and disciplinary machinery which promptly attends to complaints on any member of the institute and metes out appropriate sanctions as deemed necessary on proven professional misconduct,” Olushekun said.

    He assured that the CIS has created different platforms to ensure that stockbrokers are well equipped to perform their roles effectively while ensuring investors protection in the capital market.

    Olushekun’s statement came just as the NSE cautioned investors not to misconceive the IPF for insurance scheme.

    Executive director, market operation and technology, Nigerian Stock Exchange, Mr. Adeolu Bajomo,said IPF was not an insurance policy which an investor can make claim on but a protection scheme for investors who genuinely made transaction with stockbrokers but such deal was not executed or was somehow defrauded by the stockbrokers.

  • Stockbrokers catalyst for economic growth

    Stockbrokers catalyst for economic growth

    The role of the capital market as the catalyst for an economy is undisputable. But stockbrokers, who are the backbones of the capital market, have for long been in the shadow.

    The Chartered Institute of Stockbroker (CIS), which certifies and regulates the conduct and practices of the stockbroking profession, had played behind-the-scene role in recommending economic policies to government. But the behind-the-scene approach has ensured little or no recognition for the virile contributions of stockbrokers.

    The first-ever national workshop of the CIS pivoted stockbrokers to the forefront of national discourse and policy recommendations. With the theme: Working the Transformation Agenda- the real issues, the event held at the prestigious Transcorp Hilton Hotel, Abuja brought together major policy makers in the financial markets and the economy and lived up to its billing as a platform for private-public sectors’ engagements on national growth and development.

    The event attracted regulators of the capital market and relevant government agencies and parastatals like the Bureau of Public Enterprises (BPE), Debt Management Office (DMO), the Federal Ministry of Power and a key player in the telecommunication sector like MTN Nigeria. The workshop put in the front burner two major issues- power and telecoms.

    Although the telecoms sector is seen to have taken off the ground in Nigeria, stockbrokers believed that it has not yet fulfilled the much desired purpose of being a catalyst for democratising wealth creation for the people of Nigeria, especially investors in the capital market. None of the four telecom giants-MTN Nigeria, Airtel, Glo and Etisalat, operating in Nigeria has deemed it fit to list their shares on the Nigerian Stock Exchange (NSE).

    Director-General, Securities and Exchange Commission (SEC), Ms Arunma Oteh, in her opening remark at the workshop, said the capital market was critical to the growth of the Nigerian economy.

    According to her, the easiest way for outsiders to see Nigeria is through the capital market. The market is very useful to support government in sourcing cheap funds for economic growth as annual budgetary allocations especially as it concerns capital projects would never be enough to deliver dividend of democracy to the people.

    She noted that the recent forbearance gesture for the capital market by government was a step in the right direction as it was necessary to refuel the economy.

    She pointed out that relentless efforts are being made to further deepen the market by getting highly capitalised companies in both the power and telecom industries to list their shares on the NSE as well as create additional flow of wealth through other sources like the Sovereign Wealth Fund (SWF), Collective Investment Scheme among other sources.

    “The consultative approach we have taken to call large companies to the capital market will soon begin to yield fruit,” Oteh said.

    She predicted that 2013 will be a better year for the capital market urging all operators to play constructive roles in the development of the market.

    Chairman, CIS Annual National Workshop Committee and Group Managing Director of BGL Plc, Mr Albert Okumagba, said the workshop was only the beginning of serious engagements on national issues noting that CIS has more to offer the economy through its national workshop in the years ahead.

    According to President, Chartered Institute of Stockbrokers (CIS), Mr Ariyo Olushekun, said the workshop woule be organised annually and it would initiate and advance national discourse on economic issues while also serving as a platform for monitoring economic policies and implementations.

    Chairman, Technical Committee of the National Council on Privatisation (NCP), Mr. Atedo Peterside,who chaired a session, painstakingly addressed concerns on the current power reforms. Peterside, a revered investment banker who doubles as chairman of Cadbury Nigeria Plc and Stanbic IBTC Hioldings Plc , said the successful implementation of the power agenda will result in a dramatic boom for the economy.

    According to him, milestones that have been achieved since 2005 included the passage of the Electric Power Sector Reform Act by the National Assembly in March 2005, which outlined the framework of the reform which among others include unbundling the state owned power entity National Electric Power Authority (NEPA) into generation, transmission and distribution segments; provision for the transfer of assets, liabilities and staff of NEPA to Power Holding Company of Nigeria (PHCN) and then to successor generation, transmission, and distribution companies.

    He also noted the incorporation of 18 new successor companies comprising of six generation companies (gencos), one transmission company (TCN) and 11 distribution companies (discos) in November 2005 as well as the transfer of the assets, liabilities and staff of PHCN to successor companies, thereby granting the latter greater operational autonomy on July 1, 2006.

    He said that the approved five preferred bidders for Genco and 10 preferred bidders for Disco are expected to yield about $2.5 billion for government.

    He added that eligible prequalified bidders have been invited to express an interest in Afam genco and Kaduna disco on or before January 31 2013.

    Though Peterside acknowledged that the process of privatisation of the power sector has not been without its challenges, he assured the workshop that the process has reached an advanced stage given the selection of preferred bidders , a transaction which is likely to be closed by mid 2013.

    He urged all the stakeholders, including the stockbrokers, to support the power reform agenda to ensure that all its objectives were realised within the timelines.

  • Institute seeks bill’s passage

    The Registrar of Certified Institute of Shipping (CIS), Dr Alex Okwuashi, has urged the Senate to reopen deliberation on the bill that seeks to charter the institute.

    Okwuashi made the appeal in Lagos last week. He said that the institute and other stakeholders are very optimistic that the Senate would not abandon the bill.

    “All efforts are being made by the institute to get the Senate to revisit the bill so that it could be passed into law. The strategic importance of maritime to the nation has made this Bill very important.

    “The CISN Bill was originally gazetted in 2011 under the chairmanship of Hon Okey Ude, the erstwhile chairman of the House Committee on Marine Transport, but was inexplicably dropped. It was slated to be chartered with the Cabotage Act in 2003 and in 2010.

    “The bill was brought up again when the House Committee on Marine Transport reiterated the need for the institute to be chartered,’’ he said.

    Okwuashi recalled that the bill was also dropped in Dec. 2010 when it was sent to the Senate for final passage because the legislative year had ended.

    He called on all stakeholders, including the Nigeria Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA) and the Ministry of Transport, to support the institute in its bid for professionalism.

    “It is believed that if the institute is chartered, it will help to bring sanity in the way and manner shipping is done in Nigeria,” the rector said.

    The Bill is being sponsored by the CIS, the Nigerian Institute of Shipping and other maritime stakeholders.

    “The bill is a very large industry bill and also very strategic because Nigeria is a maritime nation,’’ he said.

  • CIS postpones workshop

    The maiden edition of the annual national workshop of the Chartered Institute of Stockbrokers (CIS) originally scheduled to hold on September 13, 2012 in Abuja has been shifted to the first week in November.

    Chairman, CIS’s National Workshop Committee, Mr. Albert Okumagba, said the shift would enable CIS to broaden the participation in the workshop and reach out to more groups.

    “We were pleasantly surprised by the level and the quality of responses that trailed the various announcements on the September workshop. Many other focused groups we had excluded also called to express surprise that they were not part of the plan”, Okumagba said.

    He noted that with the postponement, the CIS would be able to reach out to all the groups that were not in the plans before.

    The annual workshop as designed by CIS is meant to generate quality input which it intends to make available to the Federal Government in designing the appropriate policies for the country.