…..SEC proposes N20 mln fines, 10-year jail terms
The Securities and Exchange Commission (SEC) is pushing for harsher penalties on Ponzi scheme operators through the proposed Investments and Securities Bill (ISB) 2024, which mandates a minimum fine of N20 million or up to 10 years in prison, or both.
SEC Director-General Emomotimi Agama announced the proposal at a public hearing in Abuja, aiming to shield Nigerian investors from fraudulent schemes and enhance the capital market’s global competitiveness.
Expanded Protections and Market Reforms in ISB 2024
Agama explained that the bill explicitly prohibits Ponzi and pyramid schemes, fortifying protections for investors against illegal fund managers.
A notable amendment would allow the Investor Protection Fund (IPF), established by securities exchanges, to cover investor losses linked to the deregistration of brokerage firms, extending beyond the current coverage of bankruptcy or negligence cases.
Agama also noted the need for updates to the existing ISB 2007 to reduce ambiguities and align Nigeria’s capital market regulations with international standards.
“This bill’s passage would be pivotal in setting Nigeria on the path to a world-class capital market,” he stated, underscoring the role of a robust capital market in economic diversification.
New Provisions for Commodity Exchanges and Fintech Innovation
The ISB 2024 also introduces regulatory frameworks for Commodity Exchanges and Warehouse Receipts, essential steps for developing Nigeria’s commodities sector.
Senate President Godswill Akpabio, represented by Senator Binos Yaroe, highlighted that modernizing the financial sector through the bill is essential to making the market more transparent and globally competitive. “The ISB 2024 reflects Nigeria’s commitment to transparency and economic growth,” he said.
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A Strategic Update to Support Capital Market Growth
Osita Izunaso, Chairman of the Senate Committee on Capital Market, called the bill crucial for Nigeria’s financial framework, pointing out the disruptive influence of fintech on the capital market.
“Digital asset platforms are reshaping the capital market ecosystem,” Izunaso noted, advocating for legal revisions to address new realities.
With the bill, Izunaso argued, Nigeria can strengthen its legal framework to support fintech growth, protect investors, and bolster the capital market as a critical component of the economy.