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SEC strikes to guard buyers from bogus offers- The Nation Nigeria

SEC moves to protect investors from bogus offers


SEC strikes to guard buyers from bogus offers- The Nation Nigeria

By Taofik Salako, Deputy Group Enterprise Editor


Nigeria’s apex capital market regulator, Securities and Alternate Fee (SEC) has launched a serious modification to disclosures and knowledge to be included in a prospectus for any public providing as a part of efforts to additional safeguard the investing public from false claims and bogus choices.

With the brand new modification, firms providing equities or debt points to most of the people must embrace SEC’s contact phone quantity and electronic mail deal with conspicuously within the introductory a part of the prospectus for members of the investing public to verify the veracity of the supply.

In response to SEC, the introduction of the affirmation phase was a part of efforts to reinforce investor safety and promote transparency within the operations of the Nigerian capital market.

SEC famous that issuers ought to show prominently within the introductory a part of the prospectus that “buyers might affirm the clearance of the prospectus and registration of the securities” with the Fee by offered electronic mail and phone numbers. The brand new requirement took impact on June 18, 2020.

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“The investing public are inspired to utilise the contact info offered in a prospectus to contact the Securities and Alternate Fee the place they require info concerning the clearance of a prospectus or registration of securities,” SEC said.

The brand new requirement got here on the heels of enforcement of a brand new buyers’ identification regime additionally aimed toward enhancing transparency within the capital market and forestall the recurring incidence of unclaimed dividend.

The market had on April 1, 2020 began new identification regime below which no transactions shall be effected on any present investor’s account with out up to date and validated info as required below the accredited know-your-customer (KYC) format for the market. Any stockbroking agency that trades on any such incomplete account shall be sanctioned.

SEC had directed stockbrokers to seize full info in respect of recent shoppers and replace info of their present shoppers. The required info embrace checking account particulars, financial institution verification quantity (BVN), phone quantity and electronic mail deal with.

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“Such info needs to be validated in opposition to the Nigerian Interbank Settlement Programs Restricted (NIBSS) BVN validation portal. Brokers ought to replace their Order Administration System to allow the system flag off accounts with incomplete KYC info,” SEC said.

In response to the Fee, the clearing home for the inventory market, the Central Securities Clearing System (CSCS) ought to an editable format of lists shoppers with incomplete information to stockbrokers for them to replace and return such to CSCS.

The apex regulator mandated the CSCS to make sure transmission of full info to the registrars following transactions whereas registrars should make sure that new or up to date shareholders info transmitted to them are correctly captured within the related firm’s register of members.

“The related capital market operators are hereby suggested to notice that monitoring and enforcement of strict compliance with the foregoing will start on April 1, 2020,” SEC said.

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SEC famous that the brand new enforcement regime was in furtherance of its investor safety and market improvement mandate with a view to making sure guarantee accountability, transparency and stability within the capital market.

The Fee said that the brand new regime is aimed toward forestalling, lowering and ultimately eliminating the incidence of unclaimed dividend and to make sure that buyers obtain the advantages accruing to their investments instantly with none stress.

SEC had in November 2015 launched the E-Dividend Mandate Administration System (E-DMMS), in collaboration with the Central Financial institution of Nigeria, Nigerian Interbank Settlement System (NIBSS) and different stakeholders.

The E-DMMS is an E-dividend cost portal that ensures the cost of dividends immediately right into a shareholder’s account.

The Fee subsequently cancelled the issuance of bodily dividend warrants, choosing full e-dividend cost for firms quoted on the  inventory market.


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