The Securities and Exchange Commission (SEC) says the investments and securities bill (ISB) 2024 is proposing a penalty of not less than N20 million or 10 years imprisonment or both for ponzi scheme operators.
Emomotimi Agama, director-general of SEC, spoke at the public hearing of the bill on Thursday in Abuja.
Agama said the bill also prescribed stringent jail terms and other stiff sanctions for the promoters of ponzi schemes.
He said the commission introduced an express prohibition of ponzi and pyramid schemes and other illegal investment schemes to prevent illicit fund managers from fleecing unsuspecting Nigerians of their funds.
Agama also said the commission had observed areas which required review in the ISB 2007 to strengthen existing provisions, remove ambiguities, and introduce new provisions that would enhance the international competitiveness of the Nigerian capital market.
“A vital provision in the bill is the new stipulation that the Investor Protection Fund (IPF) set up by the securities exchanges would compensate investors who suffer pecuniary losses arising from the revocation or cancellation of the registration of a dealing member firm,” he said.
“In the extant law, compensation from the IPF is limited to instances of ‘bankruptcy’, ‘insolvency’ or other acts of ‘negligence’ by a dealing member firm.
“This bill also contains an entirely new part which provides for the regulation of Commodity Exchanges and Warehouse Receipts.
“These provisions are essential for the development of the entire Commodities ecosystem.
“There is no doubt that Nigeria needs and deserves a world-class capital market to facilitate on-going economic diversification.
“The passage and enactment of the Investments and Securities Bill will be a pivotal step in this direction.”
‘BILL WILL RESHAPE NIGERIA’S CAPITAL MARKET’
In his remarks, Senate President Godswill Akpabio, said the ISB 2024 was a beacon of hope for the nation’s economic landscape.
Akpabio, represented by Binos Yaroe, senator representing Adamawa, said the country is taking a bold step toward modernising its financial market and fostering transparency by repealing the ISB Act 2007.
He said the bill is designed to create a robust and equitable environment for investments to thrive in an increasingly competitive global economy.
On his part, Osita Izunaso, chairman of the senate committee on capital market, said a well-developed capital market which serves as the bedrock for long-term capital raising and industrial development, is imperative.
Izunaso said the capital market requires a strong legal framework that conforms to the evolving societal and global realities.
“You will all agree with me that fintech has caused a lot of disruptions in the capital market in recent years such that digital assets platforms are fast gaining ground as a critic aspect of the capital market ecosystem,” he said.
“Having operated the ISA 2007 for over 15 years, it has, therefore, become apparent that the law requires holistic review in order to strengthen its existing provisions, remove ambiguities, and introduce new provisions that will enhance the international competitiveness of the Nigerian capital market.”
Izunaso said the bill would help reposition the market strategically to fulfil its role as a critical segment of the Nigerian financial system.