Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) has said it would not extend the ongoing renewal registration of capital market operators beyond the stipulated January 31, 2022 deadline.
In a circular at the weekend, SEC stated that in line with its earlier circular released on December 16, 2021, the exercise would end on January 31, 2022, and there would be no extension.
“Capital market operators that fail to renew their licences will be barred from performing capital market in 2022,” SEC warned.
SEC had last year increased the coverage of its registration by mandating non-custodian firms holding securities for actual owners to apply for registration as a nominee with the Commission. It also directed all existing investment crowdfunding portals and digital commodities investment platforms to register their operations with the Commission or cease operations.
The directive on nominee firms was part of a regulatory framework for nominee function released uring the year. The new rules require all persons not registered by the Commission as custodians, carrying on the business of nominee and holding securities on behalf of actual owners to apply to the Commission for registration as a nominee. Such securities include equities, money market, fixed income securities and derivatives, among others, with the exception of pension assets.
The rule also stipulates that a nominee shall not engage in any activity except the business of nominee companies described above.
The Commission also stated that there were requirements and eligibility criteria for raising funds through crowdfunding as well as operating a crowdfunding portal.
According to the SEC, the rules governing crowdfunding business in Nigeria came into effect on the January 21, 2021, as part of efforts by the Commission to ensure investor protection while encouraging innovation in the conduct of securities business.
“In line with the transitional provisions of the Rules, all persons and entities operating an investment crowdfunding portal and digital commodities investment platform prior to the commencement of the rules were expected to restructure all operations in accordance with the requirements of the rules and apply for registration not later than 90 days from the effective date.
“While the transitional period elapsed on the April 21, 2021, the Commission hereby directs all existing investment crowdfunding portals and digital commodities investment platforms to note the requirements and eligibility criteria for raising funds through and operating a crowdfunding portal and comply with the registration requirements or cease operations by the June 30, 2021, failing which the operations of such platform would be categorized as illegal and attract regulatory sanction as stipulated in the rules,” SEC stated.