By Modupe Gbadeyanka
The Association of Stockbroking Houses of Nigeria (ASHON) has emphasised that it is wrong for investors to just jump into the capital market without first approaching its members.
According to the association’s General Secretary, Mr Sam Onukwe, a new investor must contact a stockbroking firm for a proper Know Your Client (KYC) to ascertain basic information about him or her.
Mr Onukwe stressed that the KYC must be extensively conducted in order to ascertain information such as the address of the new investor, form of identification, source of livelihood and source of fund for investment among others.
“An investor who has some funds to invest must go through a stockbroking firm, who shall conduct the KYC which is very fundamental.
“The stockbroker must carry out investigation to ascertain that the potential investor is a fit and proper person.
“I must emphasize that because we are very mindful of people using the market for money laundry and all of sorts of illegality.
“The next phase is for the person to complete the processes of account opening forms .We shall do the account opening with the Cleaning house of The Nigerian Stock Exchange, the Central Securities Clearing System (CSCS) Plc.
“The CSCS shall provide an account number for the client and that is the basis upon which we can now buy and sell on behalf of the client. But our purchase or sale order must be based on instruction or agreement with the client,” he said.
According to him, after the rudiments of KYC and account opening, stockbrokers are interested in an investor’s Investment objective in order to know the types of asset classes that would form his portfolio.
He stated that where an investor could not clearly explain his objectives, there is a mechanism through which a stockbroker can design certain questions for the investor in order to ascertain his risk profile and other important investment variables.
Speaking on investor confidence in the market, he said confidence had been restored as investors have seen a lot of transformation on the Nigerian Stock Exchange (NSE) after the meltdown.
He explained that both capital market regulators and operators had been working together to ensure adherence to global best practices in all areas of market operations.
Recently, ASHON’s Chairman, Mr Patrick Ezeagu, explained that the association would soon commence its enlightenment programme tagged ‘ASHON Investor Education’ in order to meet the yearning demand for market knowledge by the existing and potential investors nationwide.
According to Mr Ezeagu, the youths would be factored into the reviewed programme in order to help them develop investment instinct at a tender age. He noted that ASHON’s members must always exhibit highest level of integrity as there are sufficient rules and regulations to address any act of unethical practices by its members.
He assured investors to take advantage of relatively cheap prices of stocks on The Exchange to beef up their portfolio as the market fundamentals are very strong while return on investment on The Exchange would continue to be attractive.
Commenting on what informed ASHON’s decision to float Lagos Commodity and Futures Exchange (LCFE) in conjunction with the Lagos State Government, Mr Ezeagu explained that, “An emerging trend is that government is now expanding its scope of diversification in terms of earning foreign exchange from other access other than crude oil. If we are diversifying and they have to go into commodities which has to do with agricultural products as well as solid mineral and gas, it means that there must be a platform where our members can play their intermediating roles in terms of trading on warehouses receipts electronically
“The ultimate goal for our members is to be able to push for high turnover in this proposed market. The whole process is all about how we can play our role in the economy and ensure that the economy grows in the manner its supposed to grow. We must be part of the diversified economy as Nigeria would no longer be dependent on crude oil any longer.”
more recommended stories
Chinese, Hong Kong Shares Rise as Japanese Stocks Fall
By Investors Hub Asian stocks ended.
European Shares Appreciate Despite Brexit Uncertainty
By Investors Hub European stocks have.
US Stocks Open Sharply Higher on Renewed Optimism About Trade
By Investors Hub The major U.S..
Yuletide: NNPC Warns Against Panic Buying of Petrol
By Dipo Olowookere Nigerians have been.