Unregistered investment-tech platforms have been warned by Nigeria’s Securities and Exchange Commission (SEC) not to sell international securities to Nigerians.
Only registered exchanges may issue or sell foreign securities to the Nigerian public, according to a statement released by the SEC on Thursday.
Nigeria has seen the rise of technology firms that are making it easier for ordinary Nigerians to access international and domestic stock markets. Bamboo, Chaka, and Rise are examples of fintechs.
These platforms have become increasingly common among the middle class, as they provide a safe haven for earnings to be protected from naira depreciation.
According to the SEC, these investment platforms will have their job cut out for them and will only be able to provide individuals with access to local stocks and shares, which will have an effect on their business models.
“We are still able to carry out all our operations and will continue to do so,” Bamboo said in an email statement to their customers on Friday.
“By opening a Bamboo account, you have also opened an account with our US broker partner, DriveWeath LLC. DriveWealth is licensed by the U.S. Securities and Exchange Commission and is also a member of the Financial Industry Regulatory Authority (FINRA) and the U.S. Securities Investor Protection Corporation (SIPC),” the platform added.
Rise, another impacted fintech, sent an email to its customers reassuring them that they should not be concerned, adding that it does not facilitate direct stock trading by its customers.
“Fintech is still in its nascent stages in Nigeria and it is the job of the SEC to protect public investors just as it is our duty to help you invest legally and safely,” Rise said on Friday.
“Rise has always made sure that we are in full compliance with all regulatory requirements and the recent announcement from the SEC is no exception.”
“We do not enable the direct trading of stocks by individuals,” Rise said its email on Friday, adding that it is “in touch with all the relevant stakeholders to ensure that we continue to stay on the right side of regulations.”
The Securities and Exchange Commission (SEC) announced in February that it would impose regulations on online platforms that sell securities to the average Nigerian.
SOURCE: THE GUARDIAN