Errant financial analysts to be prosecuted

By Nick Thiong’o

Errant investment and financial analysts will now lose their practicing certificates and face prosecution, industry professional group has warned.

The Institute of Certified Investment and Finance Analysts (ICIFA) said yesterday it had put in place strict disciplinary measures to deal with errant members in what is the first such serious move by a professional body to deter members from engaging in unethical conduct even as the fight against corruption gathers momentum.

“ICIFA has categorically stated that all its members must adhere to a strict code of conduct and ethics and any member who is found in breach will be dealt with in accordance with the law and our own code,” said the statement from the Council members of ICIFA, issued by the chairman of the institute Job Kihumba..

“Disciplinary action could lead to expulsion, de-registration and de-licensing. We will work closely with industry regulators to help identify and take action for any misconduct and unethical practice,” said Kihumba an industry veteran who is also a director at Standard Investment Bank (SIB).

Once a member is expelled they cannot transact any business on behalf of clients as financial and investment analysts. Members who are de-registered will be banned from practising and will face jail time. In all cases there are possibilities of fines and public announcements of the individuals concerned.

Any member of the Institute found to have been involved in malpractices, financial misappropriation or corruption of whatever form will be strictly dealt with in accordance with the Investment and Financial Analysts Act and Regulations and the By-laws of the Institute.

On the other hand, a non-member who mishandles investment transactions on behalf of clients or misappropriates their funds while practising without a valid practising certificate from the Institute will be liable to legal action as provided for in the Act and other relevant regulators’ stipulations.

The move by ICIFA follows a concern regarding players in the financial markets who are being reported as having been part or implicated in corruption cases. A casing point involves a tussle involving the Capital Markets Authority and some bond dealers where millions of money is alleged to have been made without the adherence to professional code of conduct.

The move by ICIFA is also to complement government efforts to weed out corruption.

Just recently, the national government ordered that all procurement officers resign and undergo a polygraph test and a lifestyle audit in a bid to tame corruption. President Uhuru Kenyatta has also called for a lifestyle audit of senior members of the public service as the war on corruption moves a notch higher.

ICIFA said that unfair and unjustifiable practices by individuals and institutions have largely contributed to slow economic growth by the denial of affordable credit to business and other malpractices.

ICIFA lauded recent proposals by Treasury to address the issue of affordable credit but said that there is more that needs to be done in form of consultations with the regulators and other stakeholders to address the challenges apart from regulation.

“It is important to strengthen all regulatory and governance institutions to ensure that they are able to deal with any unfair practices. We call upon Parliament, other public organs, private sector institutions, policy think tanks and private individuals to debate soberly the proposals made by the National Treasury on how to manage interest rates, financial misconduct and consumer protection with a view to create effective and efficient systems for the national good,” said Kihumba who was speaking during this years’ ICIFA annual general meeting (AGM).

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