SEC, NSE revoke 21 stockbrokers’ licences for fraud, others

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THE Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE)  have revoked the licences of 21 firms for various infractions, including inability to meet minimum capital requirement, fraud and inactivity.

With the deregistration of the firms and revocation of their licences, the firms have been expelled from the market. Besides, all former top officials of the firms would have to go through a special screening and approval before they could be employed by any operator.

A circular obtained at the weekend by The Nation indicated that 17 firms were deregistered by SEC, three expelled for failing to activate their licences and one kicked out for fraud.

The notice of expulsion, dated March 29 and signed by Olufemi Shobanjo, head, Broker Dealer Regulation Division at the Exchange, warned firms “not to engage in any activity with the above-mentioned firms” or face the music.

A source said the affected firms were poorly capitalised and, therefore, unfit to operate in the market. Both SEC and NSE had identified poor capital base as one of the factors fuelling infractions, mostly unauthorised sales of clients’shares and misappropriation of funds in the market.

The deregistered firms included Allbond Investment Limited, Consolidated Investment Limited, Dakal Services Limited, Emi Capital Resources Limited, First Equity Securities Ltd, Ideal Securities Limited, Maninvest Asset Management Plc, Metropolitan Trust Nigeria Limited, Omas Investment & Trust Company Limited, Pennisula Asset Management & Investment Company Limited, Prudential Securities Limited, Securities Trading & Investments Limited, Transglobe Investment & Finance Company Limited, Tropics Securities Limited, Wizetrade Capital & Asset Management Limited, WT Securities Limited and Zuma Securities Limited.

The firms were expelled for failuring to activate their licences were Bosson Capital Assets Limited, KFF Worldwide Solutions Limited and Silver & Gold Securities Limited while First Alstate Securities Limited was expelled for “unauthorised sales of clients’ shares and misappropriation of clients’ funds”.

Under Rule 6.12 of the Rulebook of the Exchange, 2015, members of the Exchange are banned from employing any director, authorised clerks and anyone, including principal officers, such as the chief executive officer, chief finance officer, chief compliance officer and chief risk officer, who have been indicted by the Exchange or the Commission without its nod.

Also, the rule disallows other stockbroking firms from employing an employee of a stockbroking firm or dealing member expelled from the Exchange; anyone expelled, as an authorised clerk or its equivalent, from any other exchange; any person refused admission as a member of the Chartered Institute of Stockbrokers or any person expelled from its membership; any person expelled as a member of any professional association or institute and any person who is insolvent or has been convicted of theft, fraud, forgery, or any other crime involving dishonesty.

Nation 

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