Friday, 26th February 2016 By Melissa Kaijuka Mbabazi
Why Certification is relevant to Capital Markets Development in Uganda
Professional certification is a process in which a person proves that he or she has the knowledge, experience, and skills to perform a specific job. The proof comes in the form of a certificate earned by passing an exam that is accredited by an organization or association that monitors and upholds prescribed standards for the particular industry involved. In order to apply professional standards,increase the level of practice and protect the public, a professional organization might establish a certification. Uganda is steadily moving towards recognised professional qualifications; it is not uncommon to find professional qualifications for accountants, secretaries, architects, lawyers and a number of other professional categories. The argument has always been that a degree is not enough; more specialized training is necessary to create a pool of well-rounded, knowledgeable and experienced personnel within that field.
For Capital Markets, the Chartered Institute of Securities and Investments (CISI) qualifications have been introduced in Uganda for practitioners within the financial services industry. These qualifications are internationally recognised and the programme entails levels of progression from an international introduction to securities and investments course to more advanced courses such as a Diploma in Capital Markets. The initial phase has been to introduce a pilot programme consisting of participants from brokerage firms, fund managers, the stock exchange,bankers, custodians and other financial services practitioners to participate in the International Introduction to Securities and Investments (Africa)course. This is a Level 3 qualification in the UK framework; the same principles are given- however using African examples. The second phase would involve the development of a Uganda-specific regulation exam (although there are hopes that we could merge this to the Kenya regulatory exam that is already underway). The CISI also runs technical exams in a broad range of subjects(“specialist qualifications”) which include Global Securities, Derivatives,International Certificate in Wealth and Investment Management, Global Compliance, Corporate Finance, among others.
According to Phillip Bamhart, The Guide to National Certification Programs, “the growth of certification programs is also are action to the changing employment market. Certifications are portable, since they do not depend on one company's definition of a certain job. Certification stands about the resume and the professional reference by being an impartial,third-party endorsement of an individual's professional knowledge and experience.” This goes to show how necessary it is for Uganda to move towards more certified professionals within Capital Markets. Our outlook at the Capital Markets Authority has been to tag the CISI qualification to the licensing process which means that market intermediaries will need to prove a general understanding of securities and investments before having their practicing licenses issued to them. In my view, this will allow an appreciation by both investors and issuers on the quality of advice that they are being given by the certified market intermediaries.
Having personally completed two of the CISI certifications (the FSA Regulatory Exam and the International Introduction to Securities and Investments- Kenya certificate), I can say that the value that this has added to my resume has been rewarding. My affiliate membership to the CISI has placed me in a unique position to roll out this program and has opened doors within my career. It is important for individuals to engage with this program because it allows not only for career progression but also provides confidence to investors who will be receiving advice from certified staff.
Certified capital markets players also play a significant role towards economic development. The function of a capital market is to bring together those with an excess of cash (investors) and those who need to borrow cash for the long term (issuers) either by issuing and selling bonds or shares. Thus capital markets have benefits of introducing additional financing methods which in turn enhances the potential for economic growth and offers a broader range of savings choices and higher returns. To enable the effective operation of our capital market, we need well trained and knowledgeable market intermediaries who will help drive this investment cycle. Therefore the CISI course would strategically assist this process.
I will conclude by saying that many have often made reference to the fears of employers who ask; "What if I invest in training and certification for my employees and they leave?” but the common answer to this is “What if you DON'T invest in training and certification....and they STAY?!” A balance needs to be struck between these two competing interests, however one thing that is clear is that training and certification is necessary as a core operational model to help employees be better at their jobs. To adopt an internationally recognised qualification like CISI would make market intermediaries more marketable and place Uganda at a more competitive edge in the global capital markets industry.
Melissa Kaijuka Mbabazi is currently a Consultant with the Capital Markets Authority of Uganda. The findings, interpretations and conclusions expressed in this article are entirely those of the author and do not necessarily represent the views of the Capital Markets Authority