Economy

SEC Proposes Rule to Protect Investors, Stockbrokers from Risks, Losses

Published

6 years ago

17/11/2019

By Dipo Olowookere

A rule to look into issues associated with stockbroking operations and protect investors in the event of the occurrence of the risk or loss insured is being proposed by the Securities and Exchange Commission (SEC).

In a disclosure, SEC said guideline, which will come under Rule 27A is mainly “to exempt capital market experts/professionals from maintaining fidelity bonds and enable the establishment of an insurance product for dealing members of securities exchanges to cover the risks associated with stockbroking operations and protect investors in the event of the occurrence of the risk or loss insured.”

The apex capital market regulator tagged the proposed rule as Insurance Policy for Corporate Bodies Licensed as a Dealing Member of a Securities Exchange.

In the existing Rule 27, which talks about Fidelity Bond, states that, “Every registered corporate body shall provide and maintain a bond which shall be issued by an insurance company acceptable to the Commission against theft/stealing, fraud or dishonesty, covering each officer, employee and sponsored individual of the company.”

But SEC wants this amended to “Every registered corporate body other than a corporate body licensed as a dealing member of a securities exchange and capital market experts/professionals shall provide and maintain a bond which shall be issued by an insurance company acceptable to the Commission against theft/stealing, fraud or dishonesty, covering each officer, employee and sponsored individual of the company.”

In the new rule, the agency is proposing that, “Every registered corporate body licensed as a dealing member of a securities exchange shall procure and maintain an insurance policy issued by an insurance company acceptable to the commission. The policy shall cover all aspects of the insured business activities and risks including but not limited to the following:

“(a) fidelity guarantee against theft/stealing, fraud or dishonesty, covering each officer, employee and sponsored individual of the company;

“(b) professional indemnity in respect of loss arising from any claim or claims for any act or omission or breach of duty by officer, employee and sponsored individual of the company;

“(c) directors liability in respect of claims against wrongful acts committed in the capacity of a director;

“(d) legal liability, or other third-party claim;

“(e) other risks associated with its products and services.

“Provided however that the insurance policy shall take into consideration the situation whereby the dealing member is a member of multiple securities exchanges.”

It is also considering a rule that will make “every corporate body licensed as a dealing member of a securities exchange shall procure and maintain an insurance policy which shall where applicable, as may be determined by a securities exchange, name the securities exchange’s investors’ protection fund as the co-insured.

“Payments from the policy shall be utilized by the securities exchange’s investors’ protection fund towards compensating investors who have suffered losses on their securities traded on a securities exchange from the occurrence of the risks covered by the insurance policy.

“Provided however that where the dealing member is a member of multiple exchanges, payment shall be made to the relevant securities exchange where the defalcation occurred.”

In addition, it is proposing that, “The insurance policy maintained by a dealing member of a securities exchange shall provide that payment under the insurance policy can be made directly to the:

“(a) securities exchange’s investors’ protection fund which shall compensate investors who have suffered losses or;

“(b) affected dealing member with the prior written consent of the securities exchange’s investors’ protection fund.”

“The insurance policy shall provide that it shall not be cancelled, terminated or modified by the dealing member of a securities exchange without the prior written consent of the securities exchange’s investors’ protection fund and the commission. Where the cancellation, termination or modification is at the instance of the insurance company such cancellation, termination or modification shall not be carried out except after written notice shall have been given by the insurance company to the commission and the securities exchange’s investors’ protection fund, not less than sixty (60) calendar days prior to the effective date of cancellation, termination or modification.

“The insurance policy shall be provided in such reasonable form, terms and under such premium as the fiduciary duties of the officer, employee or sponsored individual require, but with due consideration to all

relevant factors, including but not limited to the risks insured, products and services, clientele, the value of the aggregate assets of the dealing member of a securities exchange in relation to all its registered functions, to which any officer, employee or sponsored individual may have access, the type and terms of the arrangements made for the custody and safekeeping of assets and securities in the company’s portfolio,” it added.

“The insurance policy shall cover not less than 20% of the minimum paid up capital of the dealing member of a securities exchange.

“Every dealing member of a securities exchange shall file with the commission and the securities exchange:

“(a) a statement of the nature and value of a claim within five (5) business days after the making of any claim under the insurance policy; and

“(b) a copy of the terms of the settlement of any claim made under the insurance policy within five (5) business days of the receipt thereof.

“Every securities exchange on the advice of the securities exchange’s Investor Protection Fund (IPF) shall provide quarterly reports to the commission on all claims settled under the insurance policy, and the report shall include the name of the investor and the sum received under the insurance policy.”

Economy

Customs Street Chalks up 1.08% on Renewed Buying Pressure

Published

5 hours ago

06/12/2025

Dipo Olowookere

By Dipo Olowookere

A 1.08 per cent growth was further printed by the Nigerian Exchange (NGX) Limited on Friday on improved appetite for Nigerian stocks.

Data showed that the insurance sector lost 0.61 per cent yesterday due to profit-taking as the energy space gave up 0.08 per cent, while the commodity counter closed flat.

However, the industrial goods landscape appreciated by 2.06 per cent, the banking index improved by 1.31 per cent, and the consumer goods sector expanded by 0.83 per cent.

At the close of business on Customs Street, the All-Share Index (ASI) increased by 1,563.92 points to 147,040.07 points from 145,476.15 points and the market capitalisation went up by N996 billion to N93.722 trillion from N92.726 trillion.

UAC Nigeria led the advancers’ log yesterday after it grew by 10.00 per cent to N96.80, Transcorp Hotels jumped by 9.71 per cent to N172.80, Royal Exchange appreciated by 8.89 per cent to N1.96, Ikeja Hotel soared by 8.74 per cent to N31.10, and Veritas Kapital leapt by 8.07 per cent to N1.74.

On the flip side, Union Dicon declined by 10.00 per cent to N6.30, ABC Transport slipped by 9.88 per cent to N3.10, AXA Mansard depreciated by 7.19 per cent to N12.90, FTN Cocoa lost 4.62 per cent to trade at N4.75, and Guinea Insurance dropped 3.36 per cent to finish at N1.15.

A total of 38 stocks ended on the gainers’ table and 17 stocks finished on the losers’ table, representing a positive market breadth index and strong investor sentiment.

Traders transacted 361.6 million equities for N14.8 billion in 21,051 deals yesterday versus the 1.9 billion equities worth N19.2 billion traded in 23,369 deals a day earlier, showing a decline in the trading volume, value, and number of deals by 80.97 per cent, 22.92 per cent, and 14.20 per cent, respectively.

The busiest stock for the session was Zenith Bank with 59.5 million units worth N3.6 billion, Access Holdings traded 46.1 million units valued at N973.0 million, Fidelity Bank exchanged 29.4 million units for N560.4 million, FCMB transacted 27.9 million units worth N293.9 million, and Tantalizers sold 13.0 million units valued at N29.8 million.

Economy

Nipco, 11 Plc Crash OTC Securities Exchange by 4.76%

Published

6 hours ago

06/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.

The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.

Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.

The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.

Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.

During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.

Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.

InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.

Economy

Naira Depreciates to N1,450/$1 at Official Forex Market

Published

6 hours ago

06/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.

The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.

Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.

Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.

As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.

However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.

Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.

As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.

With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.

Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.

Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.