The Securities and Exchange Commission (SEC) has improved the regulation of collective investment schemes (CIS) in the nation’s capital market, thereby reducing the risk of investors losing their money.

CIS, also known as  unit trust schemes  or mutual funds   enable   low income investors to contribute to a pool of funds, which eventually allow them to spread their risks and have access to services of  professional fund managers.  

In the past many investors lost money in some of  such schemes that were not properly managed. However, SEC has strengthened its regulation of  CIS,  given its determination to encourage more patronage of that sector of the stock market.

Accessing the   performance of the CIS, the Head, Asset Management, FBN Capital   Limited, Mr. Michael Oyebola, said in an interview with THISDAY last week that the apex regulator had done well in the regulation of CIS.

He said the apex regulator had asked for enough information that was needed to regulate the market.

According to him, the information had  made  the c1ommission  put in place strategies that would ensure  safety of investments in CIS.

Oyebola said: “Regulators are now doing a fantastic job. They have asked for enough information they need to regulate the market. They have told the fund managers to submit weekly Net Asset Value and how they came about the calculations. The regulators now ensure that Annual General Meetings (AGMs) are held and that professional managers now manage the funds. They are doing a fantastic job and they are doing everything to protect unit holders.”

The Director-General of SEC, Ms. Arunma Oteh, had said recently that there was a great opportunity for growth in that sector of the market given the experience from other countries.

According to her, current statistics revealed that only about  five million out of a population of 150 million Nigerians invest in the capital market.

She stated further that,  of this total, only 230,000 people, representing 0.15 per cent of the total population, invest in CIS.

  “We believe that there is great opportunity for growth in this aspect of the market both for the investor and the managers of such funds. In anticipation of the expected growth, the commission has intensified efforts to strengthen the market including examination of fund managers and trustees of such schemes and recently encouraged the establishment of an industry trade group for the fund manager,” Oteh said.

There are about 26 CIS funds listed on the memorandum sector of the Nigerian Stock Exchange (NSE) where their prices are displayed on daily basis for investors.

Source: ThisDay/Goddy Egene