In yet another surprising turn of events, the Nigerian government has declared fintech trading platforms like Chaka, Trove, Bamboo, and Risevest, illegal.
The trading platforms, which is used by many Nigerians to invest and trade in stocks listed on the Nigerian and foreign stock exchanges, have been struck by government regulation, restricting their operations.
This restriction was announced by the Securities and Exchange Commission (SEC) in a statement that was issued on Thursday.
An excerpt of the statement reads:
“The attention of the Securities and Exchange 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 SEC further stated that;
“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.”
Read also: Nigerian Central Bank Explains Why It Bans Cryptocurrency Trading in The Country
Experts that attempted to interpret this statement, said this means that Nigerians can trade on online apps, but those apps would not be able to settle through Nigerian brokers who have been warned to desist from partnering with these online trading apps.
Bamboo, through its CEO – Richmond Bassey, has given it users the assurance that their assets are safe and easily accessible. He also added that Bamboo is already having talks with the SEC and their broker partners to ensure that the interests of their users are fully protected.
Chaka also spoke through its CEO, Tosin Osibodu, assuring its users of the safety of their assets. Chaka noted that talks are ongoing with SEC on getting registered.
“At Chaka, we have always maintained a strict commitment to compliance. From inception, we made it imperative that all equities available through Chaka’s app are offered through regulated parties like Citi Investment Capital Limited (CICL) and others who are licensed by the Nigerian SEC and other financial regulators.”
“We are pleased to inform our stakeholders and the general public that Chaka has taken the necessary steps to register with the Securities & Exchange Commission of Nigeria (SEC) for a newly created license, as SEC continues to maintain its avowed intention to encourage innovation within the market space.”
Public outcry and reactions have trailed the new SEC directive, with many showing their displeasure with the new government incessant crackdown on seemingly legal online investments.