The Chartered Institute of Stockbrokers (CIS) has strengthened its disciplinary and surveillance mechanisms as part of its zero tolerance stance for infractions, and in order to boost investor confidence in the Nigerian capital market.
The unwholesome practices of some brokers in the past contributed to the reluctance of some investors to return to the stock market despite the low valuation of equities and significant recovery witnessed in the past weeks.
However, the President of CIS, Mr. Ariyo Olushekun, disclosed last week at the 16th Annual Stockbrokers Conference in the Lagos that the institute, which is the professional bode for the all registered brokers in Nigeria, had introduced a Code of Ethics to guide the activities of its members as a market discipline mechanism.
"In addition, we have strengthened our disciplinary and surveillance mechanisms by which we sanction our members whose conduct are called to question by clients and/or colleagues. Other operators in the market are encouraged to adopt the prescription in the Codes to shape their conduct in the capital market," he said.
Apart from the effort of the institute, Olushekun noted that the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE), have also have contributed to a higher standard of conduct in the market, further strengthening the confidence in the professionalism of market operators.
"The NSE has recently introduced some institutional reforms for more efficient securities price discovery and market liquidity. These include the introduction of securities lending and licensing of market makers. We are convinced that these initiatives will help stabilise the market and further propel market growth," he said.
The CIS boss declared that the stock market is an incomparable avenue for wealth creation as it provides a unique platform for millions of people to participate in activities that generate wealth.
According to him, the key sectors of the economy must be represented in the stock market to enable prosperity to reach a larger number of Nigerians.
"The Telecommunications sector is one such key segment of this economy. Profits of the major operators amount to hundreds of billions of naira. Ordinary Nigerians should participate in this process. This is one of the ways to engender a sense of belonging and alleviate poverty," he said.