Nigeria’s Securities and Exchange Commission (SEC) has warned capital market operators to stop supporting online investment trading platforms and providing access to unregistered foreign securities in Nigeria.
The regulator said that securities not registered in Nigeria and platforms providing access to them were acting against the law warning that capital market operators in partnership with the platforms must stop providing brokerage services for foreign securities.
Furthermore, it directed investment platforms such as Risevest, Bamboo, Chaka and Trove to cease all offerings for foreign stocks to Nigerians adding that only registered exchanges may issue, or sell foreign securities to the Nigerian public.
SEC said, “The Commission categorically states that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public. Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.
“The Commission enjoins the investing public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.”
The move comes months after the Central Bank of Nigeria barred banks from allowing cryptocurrency-related transactions in the country. It’s worth noting that in recent years, Nigeria has witnessed the emergence of technology companies that are easing access to foreign and local stock markets.
This development follows the dispute in December last year between the SEC and Nigerian investment tech platform, Chaka Investment Technologies. The SEC accused the firm of engaging in investment activities, including providing a platform for purchasing shares in foreign companies such as Google, Amazon, and Alibaba, outside the Commission’s regulatory purview and without requisite registration.
Chaka assured users necessary steps have been now taken to register with SEC. Its CEO Tosin Osibodu said, “At Chaka, we have always maintained a strict commitment to compliance. From inception, we made it imperative that all equities available through Chaka’s app are offered through regulated parties like Citi Investment Capital Limited and others who are licensed by the Nigerian SEC and other financial regulators.
“We are pleased to inform our stakeholders and the general public that Chaka has taken the necessary steps to register with the SEC for a newly created license, as SEC continues to maintain its avowed intention to encourage innovation within the market space.”
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