Nigeria’s Securities and Exchange Commission (SEC) has made new rules which will affect Nigeria’s investment-tech platform.
In the last couple of years, platforms that allow Nigerians to buy stocks on stock exchanges in America have become popular. They partner with companies like Drivewealth, a cloud-based, API-driven brokerage infrastructure that handles the trading on their behalf.
Yet, in December 2020, there was some sign of regulator trouble when the SEC barred an investment-tech platform, Chaka. It ordered Chaka to stop advertising to the public and said their activities were outside the commission’s regulatory purview.
It was unclear at the time why the SEC took issues specifically with Chaka and were quiet on the rest of the investment-tech platforms. But there was also some talk by the commission on possible regulations.
New rules: “The Commission categorically states that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public. Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.”
What’s next: Look out for our analysis of the new rules as well as how investment-tech companies are responding to this new regulatory threat.