Fintech trading platforms like Chaka, Trove, Bamboo, and Risevest that allow Nigerians to invest and trade in stocks listed on the Nigerian and foreign stock exchanges have been declared illegal by the Federal Government.
This was made known by the Securities and Exchange Commission (SEC) in a statement issued and seen by Nairametrics on Thursday.
It stated, “The attention of the Securities and Exchange Commission (the Commission) has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on Securities Exchanges registered in other jurisdictions.
“These platforms also claim to be operating in partnership with Capital Market operators (CMOs) registered with the Commission.”
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The Commission categorically stated 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.
They added, “Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.
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The Commission enjoins the investing public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.”
What this means
Nigerians can trade on online apps but those apps cannot settle through Nigerian brokers who have been advised not to partner with these online trading apps.
The CEO of Bamboo, Richmond Bassey, has assured its users that their assets are safe and easily accessible, and they are already in discussions with the SEC and their broker partners to ensure that the interests of their users are fully protected.
Tosin Osibodu, Co-founder and CEO, Chaka Technologies, has also assured its users that they have taken the necessary steps to register with SEC.
He said “At Chaka, we have always maintained a strict commitment to compliance. From inception, we made it imperative that all equities available through Chaka’s app are offered through regulated parties like Citi Investment Capital Limited (CICL) and others who are licensed by the Nigerian SEC and other financial regulators.
“We are pleased to inform our stakeholders and the general public that Chaka has taken the necessary steps to register with the Securities & Exchange Commission of Nigeria (SEC) for a newly created license, as SEC continues to maintain its avowed intention to encourage innovation within the market space.”