The Securities and Exchange Commission (SEC) has revoked the registration of Mainland Trust Limited as a capital market operator, citing regulatory non-compliance and unresolved complaints against the company.
The decision, which takes immediate effect, was made under Section 38 (4) of the Investments and Securities Act, 2007, and Rule 34 (1) (e) of the SEC Consolidated Rules and Regulations 2013.
In a statement issued by the Commission on Friday, the regulator noted that Mainland Trust Limited had failed to adhere to regulatory directives, leading to the cancellation of its registration.
“The Securities and Exchange Commission (“the Commission”) hereby notifies the general public that the registration of Mainland Trust Limited as a capital market has been cancelled with immediate effect.
“This cancelation order is made pursuant to the powers of the Commission under Section 38 (4) of the Investments and Securities Act, 2007 and Rule 34 (1) (e) of the SEC Consolidated Rules and Regulations 2013.
“The Commission’s decision is informed by the company’s failure to comply with regulatory directives and non-resolution of several complaints against it,” the statement read in part.
Consequently, all clients of the firm have been advised to contact the Central Securities Clearing Systems (CSCS) for guidance on transferring their stocks to another stockbroker of their choice.
Additionally, the SEC has instructed major capital market institutions—including the Nigerian Exchange Group (NGX), the Institute of Capital Market Registrars (ICMR), the Chartered Institute of Stockbrokers (CIS), and all Capital Market Trade Associations—to cease any dealings with Mainland Trust Limited.
What you should know
Nairametrics’ research into the relevant provisions of the Investments and Securities Act, 2007 and the SEC Consolidated Rules and Regulations 2013 provides further insight into the basis for the Commission’s decision.
- Under Part VI, Section 38 (4) of the Investments and Securities Act, 2007, the SEC is empowered to suspend or cancel a certificate of registration if a market operator fails to comply with regulatory requirements.
The provision states:
“The Commission may by order suspend or cancel a certificate of registration in the manner prescribed but no order under this subsection shall be made unless the person concerned has been given a reasonable opportunity of being heard.”
This clause highlights the SEC’s authority to enforce market discipline while ensuring due process.
- Similarly, Rule 34 (1) (e) of the SEC Consolidated Rules and Regulations 2013 outlines conditions under which a market operator’s registration may be revoked. The rule specifically states that a company may lose its registration if it contravenes the Investments and Securities Act, SEC rules and regulations, the Code of Conduct for Capital Market Operators, or fails to address complaints from clients.
It provides:
“The Commission may suspend or cancel the registration granted to a market operator for any registered function where the market operator contravenes any of the provisions of the Act, the rules and regulations, the code of conduct for capital market operators or fails to do any of the following: resolve the complaints of clients or fails to give a satisfactory reply to the Commission in this regard.”
These provisions form the legal foundation for the SEC’s decision to cancel Mainland Trust Limited’s registration, highlighting the regulator’s commitment to investor protection and market integrity.
