The federal government has declared the activities of Fintech companies such as Bamboo and Trove, which give Nigerians real-time access to invest in or trade over 3,500 stocks listed on the American and Nigerian exchanges, as illegal.
The Security and Exchange Commission (SEC) in a circular to Capital Market Operators issued on Thursday, SEC said its attention had 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.
The circular “Proliferation of Unregistered Online Investment and Trading Platforms facilitating access to trading in Securities listed in Foreign Markets”, urged these platforms to desist from enabling Nigerians access securities listed by foreign companies in other countries.
The statement said, “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
“The Commission categorically states 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. Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.
“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.”
This announcement follows the trend of Nigerians who are currently investing in the U.S. stock market and hedging against the currently weakening naira.
Fintech platforms such as Bamboo and Trove give Nigerians real-time access to invest in or trade over 3,500 stocks listed on the American and Nigerian exchanges right from their smartphones or personal computers.