By Aduragbemi Omiyale
A notable fintech company in the country, Chaka Technologies Limited, has been temporarily prohibited from using its platform to trade stocks for investors in the Nigerian capital market until it is permitted to do so.
The company, which operates the popular Chaka stock trading platform, was directed to stop buying and selling stocks on behalf of investors by the Investments and Securities Tribunal (IST).
The tribunal, while ruling on Thursday, December 17, 2020, in a suit filed by the Securities and Exchange Commission (SEC), said the organisation was not authorised to carry out such activities.
SEC, which is the apex regulatory agency in the nation’s capital market, dragged Chaka before the tribunal over its activities in the ecosystem.
Chaka, a financial technology company, is used by many market participants to buy and sell both foreign and local stocks as well as other financial assets.
This did not go down well with SEC, which through its counsel, Mr Chuka Agbu (SAN), informed the tribunal that Chaka carried out the trading outside the regulatory purview of the commission and without requisite registration, as stipulated by the Investment and Securities Act 2007.
As disclosed in the processes filed by SEC, the objective of the proceedings is to ensure that all investment activities and market players are duly regulated by the agency, in line with the requirements of the law.
The proceedings came on the heels of SEC’s avowed intention to encourage innovation within the market space, whilst also ensuring that all market activities are brought within the regulatory purview and conducted within the ambit of the law and extant regulations.
SEC stressed that it was concerned that without proper regulation, the genuine aspirations of market innovators and investors could be subverted through the activities of unscrupulous actors who would try to exploit the growing popularity of fintech investment options, to the detriment of the investing public.
Meanwhile, further proceedings before the tribunal have been adjourned to January 15, 2021.
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