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Tag: regulators

  • Regulators should ensure compliance

    Regulators should ensure compliance

    Olufemi Abioye, director of Centre for Consumer Concern Initiative (CCCI), has decried regulators’ lack of attention to post-product compliance.

     He said:  “Most consumers are unaware of their rights, which is challenging for them to pursue restitution if a product causes them harm.”

     Abioye said  most  do not get value and satisfaction from product or service.

     “Although the manufacturer  should guarantee safety of customers, regulators have a duty to adhere to production and safety requirements”. 

    Read Also: Fubara, Wike feud: Tinubu, PDP governors mediate

    “What is evident is FCCPC, SON and NAFDAC do not effectively monitor products. This is attributable to poorfunding and others…’’

     the truth is, a manufacturer will rather spend less to produce a product while hoping to reap a bounty of profit, thus the tendency to compromise product composition and stipulated specifications”.

  • Access Bank rallies bankers, regulators aginst e-fraud

    Access Bank Plc yesterday hosted its annual anti-fraud week stakeholders’ workshop in Lagos.

    The event, attended by bankers across the industry and representative of the Central Bank of Nigeria (CBN), Nigeria Interbank Setllement System (NIBSS)  was opportunity for stakeholders to share ideas on how to tackle e-fraud.

    Speaking the the event, Executive Director, IT and Operations at Access Bank Plc, Ade Bajomo, said the objective of the programme was  to share information and deepen knowledge on identity fraud. “It is actually, one for the fastest growing sector in the crime industry. Everything we are doing right now, is becoming more digital.  As we become more digital, we have to raise our awareness, because we are as strong as our collective awareness”.

    Speaking further, he said: “If I know something has happened to my neighbor, I am more aware of it, and I will do something that will prevent me from being exposed to it. The purpose of today’s event is to bring together, industry knowledge, and experience and share information and deepen knowledge about identity fraud, social engineering fraud, so that we can actually protect our customers better dustry,” he said.

    Continuing, he said: “From our security perspective, we think through security and we build it inside our projects. You cannot see projects conceived and run in Access Bank without having security in mind. We have people being trained and constantly being trained.

    Also speaking, representative of Nigeria interbank settlement System (NIBSS), said e-fraud attacker uses human interaction to obtain or compromise information.  “Attacker my appear unassuming or respectable. Pretend to be a new employee, account manager among others”.

    Linus Okeke of Ernst and Young, said  by asking questions, the attacker may piece enough information together to infiltrate a companies network.

  • PENCOM engages telcos, regulators, others on micro-pension

    The National Pension Commission (PenCom) has commenced the sensitisation of network service providers and other relevant regulators for efficient and effective registration of people for micro-pension scheme. The Commission plans to kick-start the scheme next year.

    A statement by the Commission said workers in the informal sector are also being targeted with a view to creating the enabling environment and buy-in.

    According to the Commission, it is evident that a robust technological platform that would support the provision of customer services is necessary to effectively and efficiently register, collect contributions, provide Retirement Savings Account (RSA) support, pay benefits and provide financial advisory services to this class of workers.

    The statement read: “Coincidently, special mobile phone applications had been successfully implemented in some jurisdictions for financial transactions, including provision of pension services to the self-employed and informal sector workers. The success stories of these applications drives the confidence that similar platform can be designed and implemented in Nigeria.

    “Consequently,  the Commission had already commenced the sensitisation of service providers and relevant regulators as well as the targeted workers in the informal sector with a view to creating the enabling environment and buy-in. In addition, a Department has been established in the Commission to drive the implementation of the Micro-Pension plan.”

    The Commission explained that the Pension Reform Act (PRA) 2014 expanded coverage of the Contributory Pension Scheme (CPS) to the self-employed and persons working in organisations with less than three employees.

    “As this category of workers constitute the larger percentage of the working population in the country, there is no doubt that to achieve the Pension Industry’s strategic objective of covering 30 per cent of the working population in Nigeria under the CPS by the end of 2024, all efforts should be on deck  to extend coverage to this important segment of the Nigerian economy.

    “In addition, due to their widely dispersed nature and generally low and irregular incomes, there is need to provide a pension plan that would meet their special characteristics. In this regard, the Micro-Pension plan initiative has been conceived within the context of an industry wide strategy to bring this class of workers on board.”

     

     

     

  • Regulators renew commitment to investors’ protection

    Capital market regulators across the world rounded off their annual conference in Budapest, Hungary with a renewed commitment to protecting investors and ensuring fair and transparent markets amid concerns over the growing influence of digital coins and financial technologies (fintech).

    Members of the International Organisation of Securities Commissions (IOSCO) met last week for their 43rd Annual Conference to discuss issues facing securities market regulators and supervisors today. IOSCO is the global body of securities regulators and its members regulate more than 95 per cent of the world’s securities markets in more than 115 jurisdictions.

    In their meetings, the IOSCO Board, IOSCO´s Growth and Emerging Markets (GEM) Committee, the four Regional Committees and the Affiliate Members Consultative Committee (AMCC) advanced their initiatives aimed at protecting investors, ensuring fair, efficient and transparent markets, and mitigating systemic risk.

    The public sessions of the conference focussed on four key issues, including sale of unsuitable products to retail investors, challenges of Fintech and digitalisation, shift from active to passively managed collective investment schemes, and small and medium enterprises (SME) access to funding through capital markets.

    The conference, hosted by Magyar Nemzeti Bank, the Hungarian Central Bank, attracted some 650 securities regulators, industry representatives and other financial market participants from around the world.

    The IOSCO board discussed how best to approach the continuing growth of Initial Coin Offerings (ICOs) and agreed to develop a support framework to assist members as they consider how to address the domestic and cross-border issues stemming from coin offerings that could impact investor or consumer protection.

    The board also made progress on its work to protect retail investors from the risks stemming from the offer of binary options and other OTC leveraged products, particularly by unlicensed firms on a cross-border basis. Members discussed enforcement practices found to be effective in mitigating the risks of these products to unsophisticated retail investors.

    In addition, the board reviewed proposed measures to help members regulate retail OTC leveraged products, including a tool-kit of policy measures with guidance for members to regulate the offer and sale of these products by intermediaries; and a tool-kit of investor education material with guidance about the products and the firms that sell them.

     

     

    In the area of asset management, the IOSCO board discussed exchange traded funds and reviewed the progress of IOSCO’s efforts to complete its work on measuring leverage in investments funds.

    In the area of standards implementation, the board supported a proposal to assess the consistency in implementation by various IOSCO members of money market fund (MMF) reforms against IOSCO´s 2012 recommendations for MMFs.

    Members also  supported  a proposal for a third implementation review of the Principles for the Regulation and Supervision of Commodity Derivatives Markets. IOSCO issued the principles in 2011 to ensure a globally consistent approach to oversight that aims to improve price transparency and deter market manipulation in the commodity derivatives markets.

    Board members agreed to establish an information-sharing network among IOSCO members to gain insight into the issues around sustainability, including the details of issuer disclosure and its relevance to investor decision making.

    The board agreed to launch a Fintech Network to facilitate the sharing of information, knowledge, and experiences related to FinTech among IOSCO members. The Fintech Network also will serve as a forum for collaborative work on regulatory issues, trends, and emerging risks.

    Chairman, IOSCO Board, Ashley Alder, noted that IOSCO members have taken important steps to advance IOSCO´s priority work in focus areas such as market resilience, financial technologies, and information sharing among securities market regulators.

    He pointed out that the steps being taken will address some of the biggest risks to investor protection, market integrity and financial stability.

  • National Assembly to partner regulators on capital market development

    The National Assembly has reiterated its commitment towards the development of the Nigerian capital market.

    Chairman, Senate Committee on Capital Market, Senator Mustapha Bukar, gave the assurance in Lagos during a visit to the Nigerian Stock Exchange (NSE). Also in the entourage was the clerk of the Committee, Hajia Habeebat Mohammed.

    Bukar said the Committee would work to create a right environment for investment to thrive noting that he and other members of the committee are ready to work hand in hand with capital market stakeholders.

    According to him, the committee would consider revision and amendment of some laws governing capital market activities in order to encourage the growth of the market.

    “I want to achieve two or three things during this tenure, one, I want to see how the capital market can grow during this tenure, support infrastructure development in this country and also to see how it can grow the Nigerian economy and let Nigerians see how it can compete like any other market in the world,” Bukar said.

    He said the committee has adopted a listening strategy because it needs to know and understand the issues affecting the market and the things the National Assembly can do in terms of legislations in order to create an enabling environment for the market to grow.

    “It is important for us to talk to the actors and then we see how we can work together to make the market a better place,” Bukar said.

    He said the need to have more Nigerian players in the market cannot be overemphasized noting that having more Nigerians in the market would deepen domestic investors’ base and attract other people to come into the market.

    He said that a bill has been passed and its provisions are being examined, after which it will be submitted to the Senate very soon.

    “There are so many legislations being discussed and there will be public hearings on them. The next thing is to make sure that it is presented to both the lower and upper chamber so it can be passed into laws by the National Assembly,” Bukar said.

    He lamented that after the 2008 capital market problem which affected all the entire world, the Nigerian market has yet to recover fully from the decline it had in 2008, thus underlining the need to re-engage with the populace and the private sector in order to grow investors’ confidence

    “That confidence has to be rebuilt, so we need to go and do a lot of roadshows and other explanations to attract the private sector back and address those issues that concern them,” Bukar said.

  • Regulators mull universal licence for stockbrokers

    Nigeria’s apex financial services regulators have started discussions on a new framework that will expand the scope of operations and allow brokers and dealers at the Nigerian capital market to have access to the interbank market and the primary official discount window.

    The Securities and Exchange Commission (SEC), Nigeria’s apex capital market regulator and the Central Bank of Nigeria (CBN), Nigeria’s apex bank are leading other stakeholders to open up a new ecosystem for the stockbroking industry.

    The new ecosystem for the main capital market operators was part of the highlights of the discussions at the second quarter meeting of the Capital Market Committee (CMC) meeting held in Lagos.

    Director General, Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, who spoke in Lagos at a press briefing on the activities and decisions at the CMC, said the CBN and SEC have launched formal discussions on a dual licence model that enables stockbrokers to have access to the discount window of the apex bank.

    He said all parties have shown commitments to the evolution of the new framework, although discussions were still on to determine the scope and comprehensive details of the new framework.

    Gwarzo said the new model will boost liquidity in the capital market and enhance the risk creation and management of stockbrokers as they will be able to have access to the deep pool of capital provided by the discount window.

    He noted that one of the major challenges in the capital market has been access to liquidity and the introduction of dual licence model will significantly address the problem of liquidity and related issues.

    “Our discussion with the CBN is yielding positive result and we commend the Central Bank for their commitment and dedication to the project, but the discussion is still ongoing,” Gwarzo said.

    Capital market -based intermediation has been much less efficient in Nigeria as operators face significant challenges accessing wide sources of funding and thus have very inefficient sales and trading operations or maturity transformation activities.

    The new framework may allow brokers and dealers to undertake and offer similar range of products and services as investment banks. This convergence will strengthen stockbrokers’ potential to capitalise on larger business opportunities, diversify their source of funding and enhance their market making capabilities in the capital market.

    Gwarzo added that the Commission and other stakeholders have also initiated a pilot electronic reporting and circulation system that could save quoted companies between N500 million and N1 billion in costs of printing and dispatch of annual reports to shareholders.

  • Need for multiple regulators for oil industry

    SIR: The petroleum industry operates under two, even three distinct sub sectors – the downstream, midstream and upstream. But the most critical sub sectors (downstream and upstream) are mostly engaging and have more industry operational activities.

    The downstream sector commonly refers to the refining of petroleum crude oil and the processing and purifying of raw natural crude as well as the marketing and distribution of products derived from crude oil and natural gas. The downstream sector reaches consumers through products such as gasoline or petrol, kerosene, jet fuel, diesel oil, heating oil, fuel oil, lubricants, waxes, asphalt, natural gas and liquefied natural gas and liquefied petroleum gas (LPG) as well as hundreds of petrochemical.

    On the other hand, the upstream petroleum sector includes all petroleum exploration and extraction activities such as exploration, development and processing which take place prior to the shipment of stabilised crude oil, condensate or sales gas (including liquefied natural gas.

    Upstream petroleum activities occur both onshore and offshore.

    The idea of a single regulator for the sector runs at variance as well as against the policy direction of government as approved in the National Oil and Gas Policy in 2009 which provided for a downstream and upstream regulator.

    As the industry awaits the passage of the Petroleum Industry Governance Bill by the National Assembly, concerns have been raised by industry operators on the plan to streamline all regulatory functions in the sector into a single regulatory framework.

    However, given the diversity nature of objectives ranging from guarding against systematic risk to protecting the individual consumer from fraud, it is possible that a single regulator might not have a clear focus in objectives and rationale of regulation and not be able to adequately differentiate between types of institutions.

    The content of the Bill seeks the establishment of the Legal and Regulatory Framework, Institutions and Regulatory Authorities as well as guidelines for the operations of the Upstream and Downstream sectors of the National Petroleum Industry.

    The Bill number 64, Volume 13 published in December, 2016 as index to legislative instruments specifies this.

    But a single unified regulator may suffer from some diseconomies of scale. Inefficiency could arise because a unified agency is effectively a regulatory monopoly, which may give rise to the type of inefficiencies usually associated with monopolies.

    There will be job losses for sure in an economy that is not generating or creating jobs where decision for a single regulator is final. In the event that such decision is final, staff of the Petroleum Products Pricing Regulatory Agency (PPPRA) should become the nucleus of the downstream department of the single regulator as PPPRA is already strategically placed to carry out such function.

    Also, it is not appropriate to concentrate too much power in one body where there are different players. A single regulator may not view things from the different dimensions they deserve and from the different viewpoints of the stakeholders.

    A particular concern about a monopoly regulator is that its functions could be more rigid and bureaucratic than these separate specialised agencies. It is argued that another source of diseconomies of scale is the tendency for unified agencies to be assigned an ever increasing range of functions, sometimes called Christmas tree effect.

    From these perspectives, history is on the side of two regulators for the sector thus the single regulator model has been tried and found to be unsuccessful in the past.

     

    • Dennis Mernyi,

    Abuja

  • ‘Mutual trust between regulators, firms better for economy’

    ‘Mutual trust between regulators, firms better for economy’

    Nigeria’s economy which is almost in tatters can be revived if there is a synergy of cooperation and mutual trust between industry regulators and the different companies operating in the different sectors of the economy, experts have advised.

    Speaking against the backdrop of the lingering frosty relationship between most of the existing regulatory agencies and their charges, especially startups and multinationals, a cross-section of experts said the country stands to gain more if the regulatory bodies see the companies as allies and progressive partners.

    Femi Akinwande, a brand specialist in Lagos, said there is need for regulatory bodies to win the trust and confidence of the different sectors they regulate.

    Such mutual trust, he maintained, can help the companies and economy to gain traction in terms of double digit growth on the long run.

    Citing the example of the famous Fortune 500 companies in advanced economies such as you find in the United States of America, UK and parts of Europe, Akinwande said, the similar thread that runs across the companies is the fact that they have cordial relationships with their different regulators.

    “Experience has shown that the famous fortune 500 companies we glowingly talk about today are not companies from outer space. No. They are companies that exist in advanced economies like the U.S., UK and Europe. As good corporate citizens they have come to earn the trust of the government such that policies are made not just in their favour alone but having regard for the role they play in the economy, they’re never antagonised.

    “Take Apple for instance, the turnover of Apple annually is more than the budget of the United States. Imagine the taxes Apple pays as well as the different social investments by the company which you can’t quantify. It will be foolhardy for the government to do anything that would undermine the company because if it does it has huge implications for the economy of the United States.”

    Echoing similar sentiments, Lawrence Amoebi, a lawyer and consumer rights advocate, said as much as regulators seek to regulate the activities the overall objective of such oversight functions should be to ensure that the companies and sectors being regulated turn out better in terms of efficiency and productivity which should be manifest in the service delivery and shareholders’ value among others.

    “If the objective is to witch-hunt as it has been the case in Nigeria in recent times, then we’ve a problem. No economy can grow if companies operate in fear. Naturally money will always go to where it is better appreciated.”

    Ameobi who ventilated his views on the existing suits filed against some companies by the regulatory bodies, said much as the law courts are available to anyone to pursue his or her rights, it is better parties involved in industrial disputes follow the path of alternative dispute resolution rather recourse to the law courts because of the delays and drudgery which sometimes slow down the wheel of justice.

    A clear example in Nigeria is the recent allegation by the Nigeria Lottery Regulatory Commission (NLRC) and some multinationals which borders on the propriety or otherwise of promos by the companies.

    Specifically, the NLRC accused Glaxosmithkline Nigeria Plc, the Nestle Nigeria Plc and their officials for allegedly running a fake lottery promo.

    It is pertinent for industry stakeholders to investigate the issues at hand and find a lasting solution to it. In looking at some of these allegations, there are so many questions that beg for answers; what makes the promo fake? What is the stand of regulators on promos of this nature? Whose statutory responsibility is it to oversee such promos etc. The general public needs to know.

    According to a senior lecturer of Marketing Communications, who will not want his name mentioned in press, regulators and operators must avoid being on a parallel line.

    “These businesses are in Nigeria to make our economy grow whichever way we look at it. Lapses in adherence and regulatory trajectory are issues that must be carefully deliberated because of the ripple effect of such endeavor on the economy. For instance, I am not sure of why any company and a multinational in this instance may want to float a fake promo. To what benefits of Nigerians and the company would that be? Although since the matter is in court, I believe justice will be done; however, instances of this trend of regulators/operators imbroglio as a result of confusion, misunderstanding or alleged violation of regulatory provisions can be halted on trust and show of responsibility by both parties.”

  • Regulators, govt to review securities pricing

    THE Securities and Exchange Commission (SEC) plans to spearhead a concerted effort to review the pricing of financial instruments, especially government securities, to deepen private sector funding and reduce overcrowding of the capital market by government securities.

    A source said the review of the pricing models for government securities, such as Nigerian Treasury Bills (NTBs) and government bonds, is one of the mandates of the high-powered lobbying and advocacy group, billed to be announced by the SEC before the end of next month.

    The right pricing of financial instruments is one of the highlights of the 10-year Capital Market Master Plan, which include input from other financial services’regulators, including the Federal Ministry of Finance and Central Bank of Nigeria (CBN). The Capital Market Committee (CMC), led by SEC, has started the implementation of the 2015-2025.

    The source said SEC and the advisory council would liaise with the CBN, Debt Management Office (DMO), Economic Management Team (EMT), the Federal Executive Council (FEC) and the National Assembly to ensure the re-examination of the pricing models for all instruments.

    The Capital Market Master Plan noted that the pricing of risk-free government securities, such as the NTBs, is undermining the nation’s creative financial management and crowding out private sectors from the capital pool.

    According to the master plan, a copy of which was obtained by The Nation, the situation where the rate of risk-free securities such as NTBs is very high makes any form of risk-taking very unattractive and results in government inadvertently crowding out the private sector.

    For instance, the 91-day NTBs auctioned by the CBN for the Federal Government, on July 8, this year and which matures on October 8, this year, carries a yield of 10.26 per cent. A five-year bond offered by the government the same month carries a marginal rate of about 15.3 per cent.

    The NTBs and government bonds are considered as sovereign securities and are as such deemed as risk-free instruments because they carry the authorities of the government. NTBs are, particularly, fascinating; short-termed, upfront interest payment, acceptable as collateral, guaranteed repayment at maturity and interest income not subject to tax, they make for easy way to grow funds without risk-taking.

    The Master Plan noted that the combination of risk-free and relatively high rate of NTBs and others also lead to high cost of borrowing for the economy as other non-government borrowers become uncompetitive. Non-government borrowers often tend to offer higher rates to woo investors, thereby fuelling additional risk of default.

    SEC’s Director-General, Mr Mounir Gwarzo, two weeks ago reiterated the commitment of SEC and the CMC to the implementation of the Master Plan.

    He said the Commission was working on the list of the members of the advisory council, one of the recommendations of the Master Plan, and that their names would be announced soon.

    The CMC, chaired by Gwarzo, consists of chief executives of registered capital market operators, including stockbrokers, solicitors, custodians, fund managers, issuing houses, rating agencies, registrars, reporting accountants, trustees and consultants.

    Others include the chief executives of the Chartered Institute of Stockbrokers (CIS); Nigerian Stock Exchange (NSE), Central Securities Clearing System (CSCS),  NASD Plc, FMDQ OTC Plc, Africa Exchange Holdings (AFEX) and Nigeria Commodity Exchange (NCX).

     

     

    The CMC also include two members each from observer groups, which include Asset Management Corporation of Nigeria (AMCON), Central Bank of Nigeria (CBN), Corporate Affairs Commission (CAC), Debt Management Office (DMO),  Federal Ministry of Finance, Federal Mortgage Bank of Nigeria (FMBN), Federal Inland Revenue Service (FIRS), Nigerian Deposit Insurance Corporation (NDIC), Investment and Securities Tribunal (IST), Nigerian Investment Promotion Council (NIPC), National Insurance Commission (Naicom), National Pension Commission (Pencom) and Financial Services Regulation Coordinating Committee (FSRCC).

     

     

  • Shareholders blame regulators for imposing fines on firms

    Shareholders blame regulators for imposing fines on firms

    Shareholders in the insurance industry have expressed displeasure over the huge sum deposited at the Central Bank of Nigeria (CBN) as statutory deposit by firms.

    The shareholders are also not happy with the National Insurance Commission (NAICOM) over fines imposed on operating firms in the industry for various offences especially failure to meet deadline for submission of  annual accounts and financial reports.

    The shareholders made this known at the 23rd Annual General Meeting (AGM) of Cornerstone Insurance Plc in Lagos.

    The Cornerstone shareholders said it was painful to them to see record of N128million fine paid by the company to NAICOM and other related regulators because of various offences recorded against them.

    One of the shareholders, Akinsonya Solomon,  said the incessant fines heaped on operating firms by the regulators are becoming unbearable observing that virtually all insurance firms in Nigeria have been fined for one offence or the other this year.

    Mr Robert Igwe another shareholder of the company wants the NIA as the umbrella body of insurance underwriters to take up the issue of statutory deposit of the industry lying idle with little or no interest with the CBN to the law makers.

    He posited that the huge amount could yield good interest to the various firms if used in business adding that on the alternative, the CBN should pay interest commensurate to the quantum of money deposited by the various companies.