Business & Economy

SEC Moves To Stop Investment Platforms Trading Foreign Securities

Published

4 years ago

Apr 9, 2021.

The SEC’s move, if seen through, will mostly affect young Nigerians who have been drawn by tech to invest in foreign securities
The move follows a ban imposed by the Central Bank of Nigeria, barring banks from allowing cryptocurrency-related transactions in the country

Nigeria’s Securities and Exchange Commission (SEC) has warned capital market operators to stop giving support to online investment trading platforms providing access to foreign securities in Nigeria.

In a statement issued on Thursday, the regulator said those securities were not registered in Nigeria, and platforms providing access to them were acting against the law.

It warned capital market operators in partnership with the platforms to desist from providing brokerage services for foreign securities.

“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,” the SEC said.

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