Over N1 trillion Investors’ funds threatened as SEC introduces new rule

The Security and Exchanges Commission, SEC, has compelled Nigerian investors to go through a new improved three-layered identification structure in order to access equities worth more than N1 trillion in the capital market.Information Guide Nigeria

According to the SEC, Nigeria’s primary capital market regulator, this new rule on client identification would prevent existing investors who have not updated their details from utilising their existing accounts, as well as new investors from registering new accounts.

Stockbrokers are required to produce certain mandatory information under the enhanced identification framework, such as their clients’ bank account details and a recognised identification number from the Nigerian government, such as the Bank Verification Number (BVN) or National Identification Number (NIN) (NIN).

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Investors who do not have a comprehensive three-layered identity will be denied access to the portal if these elements are not made available.

The SEC also stated that the new customer identity is intended to align transactions with the government’s national register.
With almost N1 trillion at stake in the new traders’ review, the adoption of the new rules would have an impact on various existing accounts.

Further information from market sources suggested that defaulting accounts with even minor identification mistakes or without owners‘ bank credentials would suffer a blanket ban, deepening the market’s dilemma of inaccessible funds.

Last month, the SEC revealed that it was besieged by concerns relating to a backlog of unclaimed share certificates and unclaimed dividends totaling N 177 billion.

The main cause of this issue was identified as identity irregularities, a threat that the body was resolved to eliminate with the new identification policy.

Meanwhile, the Self-Regulatory Organization (SRO), the organisation that governs activity at the Nigerian Exchange (NGX), has set Tuesday, October 4, 2022, as the start date for the implementation of the stock market identity framework.JAMB Result

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