Nigeria SEC Lift Suspension of Brokers

The Nigeria Securities and Exchange Commission (SEC) has directed the Nigerian Stock Exchange (NSE) to lift the suspension imposed on three stockbroking firms. The NSE had on April 23, 2009 suspended Capital Bancorp Limited, Hamilton Hammer and Company Limited and Arian Capital Management Limited, which are its dealing members, for irregularities.

Worried by the development, SEC summoned officials of the NSE and the affected stockbroking firms to its office in Abuja last Monday for more explanation.
However, it was gathered that while the firms were fully represented at the meeting, NSE neither sent a representative nor an apology.
THSIDAY checks revealed that after listening to the explanations of the stockbroking firms, SEC directed the NSE to lift the suspension with immediate effect, pending further investigation into the matter.
It was learnt that the Commission took the action in the exercise of the powers bestowed on it by Section 34(1) of the Investments and Securities Act (ISA) of 2007.
That Section of ISA states: “The Commission may review any disciplinary action taken by a securities exchange, capital trade point or other self regulatory organisation against its members and may affirm or set aside such decision after giving the member of the security exchange, capital trade point or self regulatory organisation an opportunity to be heard.”
Although no official confirmation could be obtained from either SEC or NSE before press time yesterday, a market source said the absence of NSE from the meeting must have been seen by the Commission as total disregard by the Exchange for the rules and regulations guiding operations in the market.
“It is high time the Commission stamped its authority in the market. It is quite saddening to note that the NSE cannot show good example by honouring a simple invitation by a regulator. It is good that SEC took the decision. We only hope that SEC will ensure compliance with the directive,” an operator said.
When announcing the suspension, the NSE had cited various irregularities for the action.
For instance, NSE said Arian Capital Management was suspended for irregularly acquiring a dealing licence. It was also alleged that its chairman was functioning as the managing director without being a qualified stockbroker, contrary to Article 154 of the Rules and Regulations of the Exchange.
In the case of Hamilton  Hammer, the Exchange  said it was suspended for transferring 80 per cent of its equity holding to another party without due approval, while Capital Bancorp Limited was suspended “for creating confusion over the ownership of the dealing licence of the Exchange: Capital Bancorp Limited or Bancorp Securities Limited.”
But officials of some of the firms had said that the NSE was punishing them for the role they played as members of the National Com-mittee set up by SEC last year to reform the nation’s capital market.
The Committee had recommended some changes in the market that are likely to affect many areas of NSE’s operations if implemented.

By Goddy Egene,