Dipo Olowookere
By Dipo Olowookere
The Securities and Exchange Commission (SEC) has said it was aware of some ethical practices of a number of stockbrokers in the capital market, who offer to pay a part of their authorised commission to institutional investors who bring ‘jobs’ to them.
In a statement yesterday, the apex capital market regulator said this was unacceptable and would not be condoned, threatening to sanction anyone caught in the act.
According to SEC, these stockbrokers induce investment through the sharing of brokerage fees or receiving agents commission with private banking officers, asset/fund managers, PFA’s and other institutional investor classes who are not duly registered or recognized as being eligible to be paid commission.
In the statement obtained by Business Post, SEC emphasised that no stockbroker shall pay or offer a percentage of the commission earned from services provided in a transaction as an incentive for investment.
It warned that, “Any capital market operator found to engage in this practice or similar acts shall be subject to strict regulatory actions in accordance with the rules and regulations of the commission.”
“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 subject to strict regulatory actions in accordance with the rules and regulations of the commission,” the statement said.
It urged the public “to utilize the commission’s whistle blowing mechanism to provide information on any known or suspected case for necessary action.”
