By Tony Obiechina, Abuja
The Securities and Exchange Commission has mandated all capital market operators to implement an enterprise risk management framework that aligns with internationally recognised standards.
According to a statement SEC on its website, these standards include those set by the Committee of Sponsoring Organisations of the Treadway Commission, the International Organisation for Standardisation and the Financial Action Task Force Recommendations.
It added that this initiative is aimed at bolstering risk management practices within the capital market, minimize systemic impacts, and safeguard stakeholders’ interests.
“All capital market operators are hereby directed to implement an enterprise risk management framework that conforms to international standards such as the Committee of Sponsoring Organisations of the Treadway Commission, the International Organisation for Standardisation (ISO 31000), Financial Action Task Force Recommendations and any other internationally recognised risk management standards.
“Adoption of comprehensive risk management practices is imperative for minimising systemic impact and safeguarding the interests of all stakeholders,” the Commission explained.
According to the SEC, the new ERM framework requires CMOs to consider their operational structure, business activities, client demographics, products, services, and delivery mechanisms.
It noted that the framework must include a comprehensive risk governance structure with clear roles and responsibilities, including the establishment of a risk management committee.
It added that organisations must implement risk-awareness programmes to cultivate a culture of risk management throughout their operations.
“This directive is aimed at strengthening the implementation of risk-based supervision, including anti-money laundering and counter-terrorism financing measures in the capital market. READ ALSO:
- Rebased GDP will improve Nigeria’s credit rating – NESG
- You are a reliable officer, Tinubu tells his ADC
- NAICOM, Fire Service partner on insuring public building
- Sunday Igboho advocates for separation if Nigeria remains dysfunctional
- Segun Arinze Reacts To Homosexuality Claims In Nollywood
“Consequently, all CMOs are required to submit a Board-approved risk management policy (selectable and searchable PDF format) on or before September 30, 2024, via email at rbs@sec.gov.ng to obtain a ‘No Objection,” it stated.
The commission explained that the directive was part of its broader strategy to enhance risk-based supervision in the capital market, including measures for anti-money laundering, countering the financing of terrorism, and countering proliferation financing.
It also asked CMOs to submit an annual risk profile by January 31 of each year.
