It’s illegal for fund managers to hold clients’ funds and securities: SEC

Fund managers have been warned not to withhold client funds and securities as this act is illegal and violates Securities and Exchange Commission (SEC) Consolidated Rule 95(1-2).

SEC Director General Mr. Lamido Yuguda, while addressing reporters after the last Capital Markets Committee (CMC) meeting of the year, said that any fund manager found doing this will face full wrath. of the main regulator in Nigeria. capital market.

At the meeting in Lagos over the weekend, he reminded fund managers that all client funds and securities managed by their companies must be in the hands of custodians.

He also drew their attention to issues arising from the recently concluded inspection by the commission of fund/portfolio management operations, in which several fund managers managing discretionary and non-discretionary products and portfolios had yet to seek a no objection of their agency products and portfolios, which is a violation of their rules.

The SEC DG revealed that the meeting also emphasized the growing importance of fintech, sustainable finance, financial inclusion and interest-free finance, adding that the SEC’s executive management team reiterated its commitment to continue raising awareness, providing knowledge and generating public participation in these topical areas.

Speaking further on the outcome of the meeting, Mr. Yuguda said: “The market community has been reminded of the annual renewal of the Capital Market Traders register, which aims to ensure that only the right and proper people trade in the market. of Nigerian capitals. The registration renewal portal for the year 2023 will open on January 1, 2023 and will close on January 31, 2023.

“Members received updates from the Commodity Ecosystem Implementation Committee that significant efforts were underway to transition the commodity market from spot trading to commodity derivatives trading;

“Furthermore, the Commodity Ecosystem Implementation Committee informed members that it engaged with the Federal Ministry of Agriculture and Rural Development (FMARD), the Standards Organization of Nigeria (SON), the Nigerian Export Promotion Board (NEPC), on the subject of commodity traceability. , which is considered a key component for the promotion of Nigerian exports.”

Mr. Yuguda announced that the electronic dividend committee has notified members of efforts to rebuild the Electronic Dividend Management Mandate System (e-DMMS) platform.

This, he said, involves having a centralized submission of electronic dividend mandate forms, an application programming interface (API) for banks and registrars, and a revamped web interface, among others.

He expressed appreciation for the House Capital Markets and Institutions Committee’s recent intervention on unclaimed dividends, saying, “the committee is investigating the increase in value of unclaimed dividends and the withholding tax on dividends. .

“The commission is ready to provide all the necessary support to the committee so that it can carry out its mission,” he said.

“CMC members have been reminded to work collectively for the enactment of the Investment and Securities Bill 2022, which will improve the performance of the Nigerian Capital Market and align it with global best practice. The Bill seeks to improve the legal and regulatory framework that will accommodate the dynamics of the Market.

“The meeting emphasized the growing importance of Fintech, Sustainable Finance, Financial Inclusion and Interest-Free Finance. The Executive Director of the SEC reiterated its commitment to continue raising awareness, imparting knowledge, and generating citizen participation on these issues.

“The Financial Education Technical Committee informed members that it has made substantial progress in introducing capital market studies (CMS) in secondary and tertiary institutions. He called on the CMC to financially support his activities,” he added.

The DG added that the Capital Market Operators were informed of the approval granted by the Honorable Minister of Finance, Budget and National Planning on the regulation of Financing without Interest (taxes), which has already been published.

“This has important implications for the market to promote new issues of products and services of the Capital Market without Interest. Issuers and Market Operators are expected to take advantage of this by creating more interest-free financial products,” he added.

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