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The Chartered Risk Management Institute of Nigeria (CRMI) has praised the Securities and Exchange Commission’s (SEC) directive for capital market operators to implement the Enterprise Risk Management (ERM) framework, aligning with international standards from organizations such as the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the International Organization for Standardization (ISO), and the Financial Action Task Force (FATF).
Dr. Ezekiel Oseni, President of the Governing Council of CRMI, lauded SEC’s initiative as essential for enhancing risk-based supervision in the capital market. He emphasized that this directive brings capital market practices in line with the stringent standards of the banking sector and promotes the widespread adoption of comprehensive ERM across Nigeria’s economy, driving inclusive growth.
Dr. Oseni stated that implementing the ERM framework will reduce systemic risks and safeguard stakeholders’ interests, ensuring more effective management of capital market activities and delivering risk-adjusted value to stakeholders.
“This initiative is a significant milestone, aligning capital market practices with the rigorous risk management standards already established in the banking sector,” Dr. Oseni said. “It underscores our objective of promoting comprehensive ERM adoption across all sectors of the Nigerian economy for inclusive growth.”
He highlighted the potential benefits of adopting the ERM framework in the capital market, noting its role in minimizing systemic risks and protecting stakeholders’ interests.
“The implementation of ERM will ensure better management of capital market operators’ activities, leading to risk-adjusted value addition for all stakeholders,” Dr. Oseni continued.
CRMI, the only chartered risk management institute in Nigeria, views this as a crucial step towards enhancing risk-based supervision in the capital market, akin to practices in the banking sector. This supports CRMI’s objective of encouraging all sectors of the Nigerian economy to embrace ERM for inclusive growth.
“This move also aligns with the institute’s commitment to collaborate with SEC in advancing risk management knowledge in the capital market and boosting investor confidence,” Dr. Oseni noted, referring to a courtesy visit to the SEC in May 2024.
“The adoption of the ERM framework in the capital market will undoubtedly minimize systemic impacts and safeguard stakeholders’ interests. Overall, better management of capital market operators’ activities will ensure risk-adjusted value addition to all stakeholders,” he reiterated.
CRMI recognizes this positive step towards improving risk-based supervision as consistent with its goal of promoting ERM across all sectors of the economy. The institute also aims to work with the SEC to enhance risk management knowledge and practice, thereby boosting investor confidence.
“For decades, CRMI has championed best practices in risk management, advocated for effective risk mitigation strategies, and upheld high professional standards,” Dr. Oseni concluded. “We remain committed to research and development in risk management, continuous capacity-building programs, and collaboration with institutions and authorities to enhance risk management practices.”
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