CRMI applauds SEC’s directive to capital market operators to implement ERM

The Chartered Risk Management Institute of Nigeria (CRMI) has expressed support for the Securities and Exchange Commission’s (SEC’s) directive for capital market operators to implement the Enterprise Risk Management (ERM) framework to align with international standards from organisations such as the Committee of Sponsoring Organisations of the Tradeway Commission (COSO), the International Organisation for Standardisation […]

The Chartered Risk Management Institute of Nigeria (CRMI) has expressed support for the Securities and Exchange Commission’s (SEC’s) directive for capital market operators to implement the Enterprise Risk Management (ERM) framework to align with international standards from organisations such as the Committee of Sponsoring Organisations of the Tradeway Commission (COSO), the International Organisation for Standardisation (ISO) and the Financial Action Task Force (FATF).

The President of the Governing Council of CRMI, Dr Ezekiel Oseni, praised SEC’s initiative as crucial for enhancing risk-based supervision in the capital market, emphasising that the move aligned capital market practices with rigorous banking sector standards and promoted comprehensive ERM adoption across Nigeria’s economy aiming for inclusive growth.

Dr Oseni noted that adopting the ERM framework would minimise systemic risks and protect stakeholders’ interests, ensuring better management of capital market activities and adding risk-adjusted value for stakeholders.

He said, “This move is a significant milestone, aligning capital market practices with the rigorous risk management standards already established in the banking sector. It underscores our objective of promoting comprehensive ERM adoption across all sectors of the Nigerian economy for inclusive growth.”

Dr Oseni, who highlighted the potential benefits of adopting the ERM framework in the capital market, noted that it would minimise systemic risks and protect stakeholders’ interests.

He further said, “The implementation of ERM will ensure that the overall activities of capital market operators are better managed, leading to risk-adjusted value addition for all stakeholders.

“CRMI, the only chartered risk management institute in Nigeria, welcomes this as the right step in the right direction in enhancing risk-based supervision in the capital market as it is done in the banking sector. This lends credence to the objective of CRMI to have all sectors of the Nigerian economy embrace ERM for inclusive growth in Nigeria.

“This also aligns with the resolve of the institute to collaborate with SEC in advancing risk management knowledge in the capital market and boost investors’ confidence which was expressed at the courtesy visit of the institute to the SEC in May, 2024.

“The adoption of the ERM framework in the capital market will no doubt minimise systemic impact and safeguard stakeholders’ interests. The overall activities of the capital market operators are to be better managed to ensure risk-adjusted value addition to all stakeholders.

“CRMI sees this positive step towards improving risk-based supervision to be consistent with its objective of promoting ERM across all sectors of the economy. The institute also aims to collaborate with the SEC to advance risk management knowledge and practice and boost investor confidence.

“For decades, CRMI has promoted best practices in risk management, advocated for effective risk mitigation strategies, and maintained high professional standards. It is committed to research and development in risk management, continuous capacity-building programs, and collaboration with institutions and authorities to enhance risk management practices.”