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    Innovation Village | Technology, Product Reviews, Business
    You are at:Home»News»Nigeria’s SEC warns investment platforms to stop trading in “unregistered” foreign securities
    Foreign securities

    Nigeria’s SEC warns investment platforms to stop trading in “unregistered” foreign securities

    4
    By Staff Writer on April 9, 2021 News

    Nigeria’s Security and Exchange Commission (SEC) has warned that online investment and trading platforms should stop selling securities of foreign companies listed on Securities Exchanges outside Nigeria.

    This means that companies like Bamboo, Trove, Chaka, Rise that currently offer subscribers the opportunity for Nigerians to buy foreign traded stocks like Apple, Facebook, Zoom e.t.c not listed on any Exchange registered in Nigeria, should stop henceforth.

    SEC Nigeria is the apex regulatory institution of the Nigerian capital market supervised by the Federal Ministry of Finance. It has the dual responsibility of

    • Regulating the capital market with a view to protecting investors; and
    • Developing the capital market in order to enhance its allocative efficiency, and pave the way for a private sector led economy.

    SEC also says in its statement released today that Capital Market operators (CMOs) working with these online platforms should desist henceforth.

    Here is the SEC’s statement issued today:

    Proliferation of Unregistered Online Investment and Trading Platforms Facilitating Access to Trading in Securities Listed in Foreign Markets

    The attention of the Securities and Exchange Commission (the Commission) has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign Companies listed on Securities Exchanges registered in other jurisdictions. These platforms also claim to be operating in partnership with Capital Market operators (CMOs) registered with the Commission.

    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.

    Signed
    Management

    It is not quite clear what this means for these Nigerian online investment platforms as they partner with US regulated bodies for the foreign securities and Nigerian SEC regulated entities for the local Nigerian securities.

    Though this materially affects the business model of these Nigerian platforms and they will certainly need to re-strategise to know what this means for their businesses

    Nevertheless some of the Nigerian platforms have responded by assuring their customers that they are working with SEC to ensure that they are in compliance with all regulatory requirements.

    This is Rise’s response below:

    We are in touch with all the relevant stakeholders to ensure that we continue to stay on the right side of regulations. Users should rest assured that their investments in Rise are secure, safe and that we will continue to be proactive about safety, regulations and compliance.

    — Rise 🚀 (@Risevest) April 8, 2021

    Here is Chaka’s response

    Dear Investors,

    In line with our recently announced resolution with SEC, Chaka has taken steps to register with the SEC for a newly created license. https://t.co/TeNz6S498e

    — Chaka (@ChakaStocks) April 8, 2021

    Bamboo’s response seen below

    We are committed to keeping your assets safe https://t.co/w5ru83C5dN pic.twitter.com/eNeiUxlXOb

    — Bamboo (@investbamboo) April 8, 2021

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    Staff Writer
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    I am a staff at Innovation Village.

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