On Thursday, April 8, Nigeria’s capital market regulator, the Securities and Exchange Commission (SEC) released a circular declaring fintech startups that allow Nigerians to invest and trade in ‘unregistered’ stocks listed on the Nigerian and foreign stock exchanges illegal.
This new ban is a regulatory threat on online investment platforms such as Trove, Bamboo and RiseVest prohibiting them from trading foreign securities not registered din the country.
The circular stated: “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.“