Lagos – The Securities and Exchange Commission (SEC) on Friday stressed the need for investment diversification through the Collective Investment Scheme (CIS), a mutual fund, to minimise risks at the nation’s bourse.
Mr Mounir Gwarzo, SEC Director-General, told the News Agency of Nigeria (NAN) in Lagos that retail investors should embrace the CIS platform to minimise investment risks.
CIS is an investment scheme that involves collecting money from different investors and investing all the money in a fund.
It is also referred to as a mutual fund.
Gwarzo advised that retail investors should embrace CIS, being managed by experts, to avoid unnecessary risks.
He said that many investors got their fingers burnt during the 2008/2009 financial meltdown due to lack of good investment advice and decisions.
The director-general said that the commission would in 2016 implement CIS fund management road map for effective utilisation.
Mr Godwin Anono, Chairman, Nigeria Professional Shareholders Association, attributed the low patronage of the CIS to dearth of information.
[pro_ad_display_adzone id=”70560″]
Anono said that the commission should strengthen CIS regulation in the country to ensure prompt release of information by the promoters to the unit holders.
He said that investors had lost interest in mutual funds due to lack of information, noting that most of them had not declared dividend nor called for annual general meetings for years now.
Mr Boniface Okezie, President, Progressive Shareholders Association of Nigeria, stressed the need for enlightenment campaigns on the CIS workability for proper understanding and increased patronage.
Okezie said that market regulators and operators had not done enough in educating investors about the advantages of investing through the scheme.
Another shareholder, Mr James Osoka, said that some investors were not aware of the CIS.
“The level of mass awareness of the scheme is low and public education about such platform was shallow and should be strengthened.’’ (NAN)