The Nigerian Securities and Exchange Commission (SEC) has issued a warning to investment platforms to stop trading ‘unregistered’ foreign securities.
Investment platforms that provide access to foreign securities listed on American and Nigerian exchanges are illegal, according to a circular issued by Nigeria’s capital market regulator SEC.
These platforms, according to the circular, are trading foreign securities that are not registered in the country and have been warned to stop. Capital market operators who work with them have also been warned not to provide foreign securities brokerage services.
“The Securities and Exchange Commission (the Commission) has been notified to the existence of several online investment and trading platforms that purport to provide direct access to securities of foreign companies listed on securities exchanges registered in other jurisdictions to the investing public in the Federal Republic of Nigeria. These platforms also claim to be working in collaboration with Commission-registered Capital Market Operators (CMOs)”, the circular states.
“The Commission categorically notes that, subject to sections 67-79 of the Investments and Security Act…and Rules 414 and 415 of the SEC rules and Regulations, only foreign securities listed on any exchange registered in Nigeria may be released, sold, or offered for sale or subscription to the Nigerian Public,” according to the circular.
Fintech startups such as Bamboo, Trove, RiseVest, and Chaka have enabled Nigerians to invest in multinational corporations such as Apple, Google, Microsoft and others. Nigerians were able to own shares in these foreign companies through these trading and investment apps, which also acted as a way to diversify investment.
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