Nigeria’s apex stock market regulator, the Security and Exchange Commission (SEC), yesterday issued a stern warning to Brokers over their unethical conducts.
According to SEC, its attention had been drawn to many reports about Brokers and Issuing Houses who are now “inducing 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 by the Commission as being eligible to be paid commission.”
Unethical Practice Of Commission Sharing By Brokers, Issuing Houses/Bookrunners And Other Receiving Agents,…more –> https://t.co/mQT232hv4X
— SEC Nigeria (@SECNigeria) May 27, 2019
SEC Reiterates thus: In light of this development, the press statement by the Securities and Exchange Commission reiterated that only capital market operators who are duly registered by SEC, are eligible to receive brokerage fees and agency commission.
Furthermore, the Commission stated that the eligible capital market operators won’t pay or offer a percentage of their commission earned from services provided in a transaction as an incentive for investment.
“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 public is enjoined to utilize the Commission’s whistle blowing mechanism to provide information on any known or suspected case for necessary action.”
SEC’s Commitment to Market Regulation: As the apex regulator in the Nigerian capital market, the Securities and Exchange Commission has constantly made conscious effort to ensure that investors’ confidence is guaranteed at all times. Recall that Nairametrics recently reported that SEC made some modifications to some of its rules which it believes are in the best interests of the market.