Securities and Exchange Commission (SEC) has proposed a bill it said will ensure that illegal fund managers are not allowed to fleece unsuspecting Nigerians of their hard-earned funds.

The bill proposes that promoters and operators of any entity engaged in a prohibited scheme are liable upon conviction to a penalty of not less than N20,000,000 or imprisonment for a term of 10 years, or both.

In simple term, it is an express prohibition of Ponzi/Pyramid schemes and other illegal investment schemes.

A Ponzi scheme is an investment scam that pays early investors with money taken from later investors to create an illusion of big profits

These and other provisions are contained in the Investments and Securities Bill (ISB) 2024, currently before the National Assembly.

The Bill proposes that promoters and operators of any entity engaged in a prohibited scheme commit an offense and are liable upon conviction to a penalty of not less than N20,000,000 or imprisonment for a term of 10 years, or both.

In his opening remarks at the public hearing held in Abuja, Senator Godswill Akpabio, president of the Senate, described the Investment and Securities Bill 2024 as more than just a legislative document but as a beacon of hope for the nation’s economic landscape.

Represented by Senator Binos Yaroe, Akpabio stated that by repealing the Investment and Securities Act of 2007, Nigeria is taking a bold step toward modernizing its financial markets, fostering transparency, and enhancing investor confidence.

He added that the Bill is designed to create a more robust and equitable environment for investment, ensuring that markets can thrive in an increasingly competitive global economy.

“As we delve into the discussions today, I urge you to embrace this opportunity with an open heart and a discerning mind.

“The importance of your contributions cannot be overstated. We are gathered here to listen, to learn, and to engage in honest dialogue.

“Your insights will help us craft a Bill that not only reflects the aspirations of our people but also addresses the intricate challenges we face in the investment landscape.

“Let us remember that the Senate remains fully committed to the Nigerian people.

“Our mandate is clear: to legislate for the betterment of our society, to create an enabling environment that fosters growth and innovation, and to safeguard the interests of every citizen. Your participation today is a vital part of this commitment.

“Together, we can ensure that the ISB 2024 is not just a piece of legislation but a transformative tool that propels Nigeria toward a future of economic resilience and prosperity.

“In conclusion, I implore you all to engage passionately in today’s discussions. Let us not shy away from challenging conversations; rather, let us embrace them.

“The journey toward a more vibrant investment landscape is one we must undertake together, and your voices are crucial in shaping the path forward.”

In his remarks, Senator Osita Izunaso, chairman of the Senate Committee on Capital Market, stated that the Nigerian capital market is the segment of the financial system in which long-term securities and financial assets are bought and sold, as it channels the wealth of savers and investors to those who can put it to long-term productive use, such as governments and corporate entities.

Izunaso emphasized that in view of Nigeria’s quest for urgent, rapid, and sustainable economic development, a well-developed capital market, which serves as the bedrock for long-term capital raising and industrial development, is imperative.

He noted that, given the crucial role of the Nigerian capital market in catalyzing national economic transformation, the market requires a strong legal framework that conforms to evolving societal and global realities.

“Distinguished ladies and gentlemen, you will all agree with me that fintech has caused many disruptions in the capital market in recent years, such that digital assets platforms are fast gaining ground as a critical aspect of the capital market ecosystem.

“Having operated the ISA 2007 for over 15 years, it has become apparent that the law requires a holistic review to strengthen its existing provisions, remove ambiguities, and introduce new provisions that would enhance the international competitiveness of the Nigerian capital market and reposition the market to more strategically fulfill its role as a critical segment of the Nigerian financial system.”

In his address, Dr. Emomotimi Agama, director-general, SEC, said the Bill also prescribes stringent jail terms and other stiff sanctions for the promoters of Ponzi schemes.

Agama noted that, having operated the ISA 2007 for several years, the Commission identified areas needing review to strengthen existing provisions, remove ambiguities, and introduce new provisions that would enhance the international competitiveness of the Nigerian capital market and reposition it to catalyze national economic transformation.

“A vital provision in the Bill is the new stipulation that the Investor Protection Fund (IPF) set up by the Securities Exchanges would compensate investors who suffer pecuniary losses arising from the revocation or cancellation of the registration of a dealing member firm.

“In the extant law, compensation from the IPF is limited to instances of ‘bankruptcy,’ ‘insolvency,’ or other acts of ‘negligence’ by a dealing member firm.

“This Bill also contains an entirely new part that provides for the regulation of commodity exchanges and warehouse receipts.

“These provisions are essential to allow for the development of the entire gamut of the commodities ecosystem.”

The SEC DG added that world-class capital markets are indispensable to the functioning of a modern economy, as no economy can achieve meaningful advancement without the crucial role capital markets play in supplying medium- to long-term finance.

“There is no doubt that Nigeria needs and deserves a world-class capital market to facilitate ongoing economic diversification.

“The passage and enactment of the Investments and Securities Bill 2023 will be a pivotal step in this direction,” he added.

Central Bank of Nigeria (CBN) has announced stringent penalties against Deposit Money Banks (DMBs) found diverting cash to hawkers, as part of its ongoing efforts to ensure responsible currency distribution.

In a circular dated November 13, 2024, the apex bank stated that any bank linked to cash seized from hawkers would face a 10 per cent fine on the total value of the withdrawn funds.

Subsequent violations will attract an incremental penalty of per cent.

The circular, signed by Muhammad Olayemi, acting director, Currency Operations Department, CBN, emphasised that the measures aimed to curb the abuse of naira notes and promote an efficient cash distribution system.

It reiterated the CBN’s commitment to enforcing its Clean Note Policy, which seeks to maintain the integrity of the naira by ensuring proper handling and circulation of banknotes.

The CBN also warned DMBs against cash hoarding and diversion, noting that such practices undermine access to cash, particularly during high-demand periods like the yuletide season.

Banks engaging in these activities will face sanctions, with the CBN working closely with law enforcement agencies to intensify spot checks and mystery shopping activities.

The circular read: “For the avoidance of doubt, it should be noted that: a) DMBs, to whom cash seized from “hawkers” of cash is traced, will be penalized 10 per cent of the total value of cash withdrawn on the day the seized cash was withdrawn from the Central Bank of Nigeria. Every subsequent offense will incur an incremental penalty of 5 per cent.

“b) DMBs found engaging in cash hoarding, diversion, or any actions that hinder efficient cash distribution, including violations of the Clean Note Policy, will incur appropriate sanctions.”

The circular highlighted the need for banks to prioritise the disbursement of cash through Automated Teller Machines (ATMs) to enhance public access and minimise reliance on unauthorised channels.

The apex bank’s directive followed rising concerns over the circulation of new naira notes in informal markets, often traced back to hawkers who sell cash at a premium. By penalising banks involved in such practices, the CBN aimed to deter the misuse of Nigeria’s currency and ensure that cash reaches legitimate end-users.

The enforcement of the penalties forms part of the CBN’s broader strategy to maintain public confidence in the financial system. The Clean Note Policy is central to this approach, as it seeks to reduce the circulation of soiled and unfit banknotes while discouraging unethical practices within the banking sector.

Also, with the festive season approaching, the demand for cash is expected to surge, prompting the CBN to double down on its regulatory efforts.

The circular advised banks to strengthen their internal processes and ensure strict compliance with the guidelines for cash disbursement.

To enforce accountability, the CBN will intensify its monitoring activities, working alongside law enforcement agencies to identify and penalise offenders. These efforts, the apex bank noted, are essential to addressing systemic inefficiencies and ensuring the effective distribution of cash across the country.

The circular noted: “As we approach the yuletide season, with an anticipated increase in cash demand, DMBs are advised to implement internal controls for responsible disbursement and accountability in respect of mint banknotes payouts at their outlets. To enhance public access to cash, we encourage banks to prioritize cash distribution through ATMs.

“During this season, the Bank, in collaboration with relevant law enforcement agencies, will intensify spot checks and mystery shopping activities to monitor and enforce responsible cash distribution and prevent Naira abuse.

United Bank for Africa (UBA) Plc, Africa’s Global Bank will raise N239.4 billion through a Rights Issue of 6,839,884,274 ordinary shares of 50 kobo each at N35.00 per share.

The Rights Issue, which opened on Friday, November 15, 2024, gives existing shareholders the opportunity to purchase additional shares in proportion to their current holdings and is being offered based on one new ordinary share for every five existing ordinary shares held by shareholders, as of November 05, 2024.

In his letter to the shareholders informing them, Tony Elumelu,  group chairman of United Bank for Africa, noted that following the resolution of the Group’s shareholders at the Annual General Meeting held in May 2024, authorising the establishment of the N400 billion Equity Shelf Programme, UBA will embark on a Rights Issue, as the first step in its broader capital raising programme.

“UBA’s Rights Issue aims to raise N239.4 billion, through the issuance of new Ordinary Shares to our shareholders. The primary objective of this Rights Issue is to further strengthen our capacity to take advantage of growth opportunities and sustain our leadership in the banking industry,” Elumelu said.

Explaining the use of proceeds, the Group Chairman noted that, beyond regulatory compliance, the funds will expand the Group’s lending capacity, investment in digital infrastructure, support sustainable business practices and expanding the Group’s African operations.

Elumelu also highlighted how UBA is driving economic growth across Africa. “Our historic partnership with the Africa Continental Free Trade Area (AfCFTA) Secretariat, where UBA pledged up to US$6 billion in financing over the next three years to support eligible SMEs across Africa underscores our commitment to fostering economic development”.

The issuance is in compliance with the revised minimum capital requirements for Nigerian commercial banks announced by the apex banking regulator in Nigeria – the Central Bank of Nigeria (CBN) earlier this year.

UBA has consistently demonstrated growth and resilience, evidenced by the Group’s strong financial performance and recent recognition within the industry. UBA’s progressive dividend policy, which has seen an increase by 14.8% annualised dividend yield has demonstrated the Group’s ability to reward shareholders consistently.

In 2023/2024, UBA won “Bank of the Year” Awards in eight of its subsidiaries – Cameroon, Chad, Ghana, Cote d’Ivoire, Mozambique, Republic of Congo; Sierra Leone; Tanzania, as well as the Regional Award for Africa and in 2024 has won World Best Frontier Markets Bank and Best SME Bank Africa.

Application for the provisional allotment of the Rights to the new ordinary Shares will be made exclusively through the NGX e-offer portal during the offer period, while existing shareholders may also apply for additional shares above their provisional allotment as described in the Provisional Allotment Letter.

Shareholders who are customers of the Bank are also encouraged to access their Rights through UBA’s internet banking and mobile banking channels.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than forty-five million customers, across 1,000 business offices and customer touch points in 20 African countries. With a unique international presence in New York, London, Paris and Dubai, UBA is connecting people and businesses across Africa and globally, through retail, commercial, corporate and institutional banking, innovative cross-border payments and remittances, trade finance and related banking services.