By Modupe Gbadeyanka
Stockbrokers operating in the Nigerian capital market have been told never to offer guaranteed investment product to its clients on investment in securities.
This warning was made by the Securities and Exchange Commission (SEC) in its approved amendments to the stock market’s regulatory framework.
SEC said where a dealing member violates this rule, a fine not less than N5 million would be imposed on the broker and a further penalty not less than N20,000 daily from when the firm is sanctioned by the Nigerian Stock Exchange (NSE) until the company completes the payment of the fine.
In a circular at the weekend, the capital market’s apex regulatory agency said under no circumstances should a dealing member lure its clients with promise of guaranteed returns on investments or against any loss.
In the amendments, the NSE the authority to sanction violators, including suspension from trading on the floor of the Exchange for not less than 10 business days.
The NSE could also suspend the authorised clerk for a period to be determined under the disciplinary process of the Exchange, and or revoke the licence of the Authorised Clerk involved in the deal.
Where the compliance officer of the dealing member has knowledge of a violation of this rule but fails to report to the Exchange, such a compliance officer shall be blacklisted.
Also, the amendments empower the Exchange to expel any dealing member from membership of the Exchange and dealing licence of such a member.
