Nigeria: SEC warns market operators against unethical conduct

May 28, 2019

Nigerian capital market regulatory body, the Securities and Exchange Commission (SEC) has warned operators in the capital market to desist from unethical practices that can lead to strict regulatory actions.

Mrs Efe Ebelo, SEC’s Head of Media said this in a statement on Monday in Abuja.

Ebelo said the attention of the commission had been drawn to an emerging trend of unethical conduct by Brokers, Issuing Houses/Book Runners and other Receiving Agents in primary and secondary market transactions.

She said the concerned operators carried out their activities by inducing investment.

This, she said was done through the sharing of brokerage fees or receiving agents commission with private banking officers, asset/fund managers, PFA’s and other institutional investor classes.

According to Ebelo, the operators induce such investments with people who are not duly registered or recognised by the Commission as being eligible to be paid commission.

She said: “Notice is hereby issued that only capital market operators duly registered by the Commission are eligible to be paid brokerage fee/receiving agents’ commission.

“And such operators shall not pay or offer a percentage of the commission earned from services provided in a transaction as an incentive for investment.

“Any capital market operator found to engage in this practice or similar acts shall be subjected to strict regulatory actions in accordance with the rules and regulations of the commission.

“The SEC therefore, enjoins the public to utilise the commission’s whistle blowing mechanism to provide information on any known or suspected case for necessary action.” she concluded.

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