The Nation Newspaper

Tag: Stockbrokers

  • Stockbrokers operating below standards, says NSE

    Stockbrokers operating below standards, says NSE

    Only a quarter of stockbrokers and dealers on the Nigerian Stock Exchange (NSE) meet the Minimum Operating Standards (MoS) for the stock market, a report has said.

    An inspection report by the NSE obtained by The Nation yesterday indicated that 44 per cent of the stockbrokers fell below the minimum average; 31 per cent were average. Only 25 per cent of stockbroking firms are operating with the acceptable minimum standards.

    The NSE inspected capital market firms between August and December, last year. The report indicated that 223 firms were inspected in 18 weeks, including 192 broker dealers, 30 brokers and one dealer.

    The NSE rates firms along a scale of five for the MoS. Based on the MoS rating methodology, 54 firms were fully compliant and scored five points, representing 25 per cent of the population of dealing members inspected. Sixty one firms scored between three and four points, representing 31 per cent, while 108 firms scored two points or less representing 44 per cent of dealing member firms.

    With this discovery, the Exchange plans to do final assessment and follow-up inspection of the 169 firms that scored between zero and four points to review the deficient areas from the 2015 inspection in order to revalidate their level of compliance.

    The inspections, according to the report, are expected to commence next week’s Monday, February 29 and it will end on May 31, this year.

    According to the report, the 169 firms scheduled for the MoS follow-up inspections will be expected to comply with the five requirements of the MoS for their registered function.

    “Firms that fail to fully comply will be adjudged to be not compliant with the MoS requirements. Appropriate steps will be taken with respect to these firms to ensure that they exit the market in an orderly manner,” the report indicated.

    The NSE had introduced the MOS in April 2014 as part of efforts to develop a stronger, stable and sustainable capital market. The MOS are a set of standards prescribed by the Exchange for dealing members to develop robust controls; strong governance framework and effective human capital that will enable them achieve best-in-class operations in order to compete on a global level for the benefit of investors and the capital market.

    The main objective of the MOS is to ensure effective operational, technological and governance structures among the dealing members of the Exchange.

    On the rationale for the new standards, the Head, Legal and Regulation Division, Nigerian Stock Exchange (NSE), Ms Tinuade Awe, said the new minimum operating standards were meant to complement the tremendous transformation that the market had undergone in recent years and to extend these forward-moving traits to the dealing members.

    According to her, the objective of the minimum operating standards is to transform the operators into more competitive and compliant operators.

    “We intend to ensure that the broker dealers, brokers and dealers have very robust controls, strong governance framework and sustainable operations that will enable them compete on a global scale for the benefit of the investors and the capital market,” Awe said.

    She noted that the capital market is very dynamic with a diverse mix of local and foreign investors who can only invest with the confidence that the dealing members operate pursuant to clearly defined standards that are comparable to those to which broker dealers in other markets operate with.

    “We simply cannot afford to be inferior to anyone in terms of size, skill, technology or organisational governance of our market participants,” Awe added.

  • Stockbrokers get NSE’s January 30 deadline for reclassification

    Stockbrokers get NSE’s January 30 deadline for reclassification

    The Nigerian Stock Exchange (NSE) has directed all stockbroking firms to perfect their status by January 30, next year to align the firms’ capital and  capacity with their roles in the stock market.

    In a circular to all its dealing members at the weekend, the Exchange directed  the firms that seek to reclassify their registered functions to complete the process on or before January 30 deadline.

    Under reclassification, stockbroking firms are expected to choose from the four categories of operations including broker-dealer, the highest level; broker, the second level; dealer, the intermediate level and sub-broker, the lowest level similar to investment agent without any trading privileges.

    The reclassification is in furtherance of the implementation of the Minimum Operating Standards (MOS) of the Exchange, which became effective on January 1, this year and the new minimum capital base stipulated by the Securities and Exchange Commission (SEC). With the expiration of the September 30, this year deadline for compliance with the new minimum capital base, SEC is compiling the final list of compliant capital market operators.

    The MOS requirements relate to all the dealing members of the Exchange and they address the five broad areas of manpower and equipment; organisational structure and governance; effective processes; global competitiveness; and technology.

    “Note that the deadline for completing the reclassification process is 30 January 2016. Trading access would be denied to firms that fail to conclude the reclassification process before the deadline,” the NSE stated.

    At the last count, no fewer than 36 stockbroking firms were undergoing reclassification of their functions, mainly reduction of functions to meet the new minimum capital base and the MOS.

    These included Alangrange Securities Ltd,  Standard Alliance Capital & Asset Management Ltd, Anchorage Securities And Finance Ltd, BGL Securities Limited, Boaz Management & Fin. Strategies Ltd, Camry Securities Ltd, Century Securities Limited, Citi Investment Capital Limited, Clearview Investments Co. Ltd, DBSL Securities Ltd, Express Portfolio Services Ltd, First Alstate Securities Limited, FIS Securities Ltd, Flourish Securities Investment & Trust Limited and G.G Securities & Investment Ltd.

    Others were Investment Centre Ltd, Investment Shark & Asset Management Ltd, LB Securities Limited, Mainland Trust Ltd, Marriot Securities & Investment Co. Ltd, Mayfield Investments Ltd, Mission Securities Ltd , Mountain Investment and Securities Ltd, Northbridge Investment & Trust Limited, Professional Stockbrokers Limited, Redasel Investment Ltd, Regency Financing Limited, Shalom Investment Financial Services Ltd, Stronghold Investment Ltd, Surport Services Limited, Tfs Securities & Investment Company Ltd, Transafrica Financial Services Ltd, Transworld Investment & Securities Ltd, UIDC Securities Ltd, Yuderb Investment & Securities Ltd and Woodland Capital Market Plc.

  • Exchange inducts 31 stockbrokers

    Exchange inducts 31 stockbrokers

    The Nigerian Stock Exchange (NSE) has inducted 31 dealing clerks, who recently qualified to trade on the Exchange..

    The induction is the end of a long-drawn process of internship and paves the way for the stockbrokers to trade on any floor of the Exchange or through personal remote access.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, charged the new dealing members to uphold the virtues of integrity, good character and high ethical and professional standards.

    He noted that the Exchange has clear and enforceable rules with a zero tolerance policy on all infractions.

    “Today’s ceremony  is not just a celebration. It marks a call to stand tall on integrity, to be spotless in character, to be professional in service and to be deep in ethics and values,” Onyema said.

    He said with the rigorous process that led the qualification of the new dealing members, the Exchange has found them worthy to be a practising stockbroker and able to trade on any floor of its floor.

     

     

     

  • Exchange inducts 31 stockbrokers

    The Nigerian Stock Exchange (NSE) has inducted 31 dealing clerks, who recently qualified to trade on the Exchange..

    The induction is the end of a long-drawn process of internship and paves the way for the stockbrokers to trade on any floor of the Exchange or through personal remote access.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, charged the new dealing members to uphold the virtues of integrity, good character and high ethical and professional standards.

    He noted that the Exchange has clear and enforceable rules with a zero tolerance policy on all infractions.

    “Today’s ceremony  is not just a celebration. It marks a call to stand tall on integrity, to be spotless in character, to be professional in service and to be deep in ethics and values,” Onyema said.

    He said with the rigorous process that led the qualification of the new dealing members, the Exchange has found them worthy to be a practising stockbroker and able to trade on any floor of its floor.

     

     

     

  • Stanbic IBTC Stockbrokers wins top award

    Stanbic IBTC Stockbrokers wins top award

    Stanbic IBTC Stockbrokers Limited, a member of Stanbic IBTC Holdings Plc, has won the ‘Best Broker in Nigeria’ award at the EMEA Finance – African Banking Awards. The latest award came on the heels of the announcement of the firm the best dealing member firm in 2014 by the Nigerian Stock Exchange (NSE).

    Chief Executive, Stanbic IBTC Stockbrokers Limited, Oladele Sotubo, said the award confirms the appetite and growing capability of the firm, leveraging on the expertise of the Stanbic IBTC Group, to provide robust services in the capital market.

    He said the award, in addition to the NSE CEO award and 2014’s listing of the Stanbic IBTC ETF 30, the Stanbic IBTC Exchange Traded Fund, are clear indications of the group’s focus on building a strong and vibrant stock market in Nigeria.

    “We are delighted to be recognized for our efforts and credible performances in the Nigerian capital market. The award reflects our strong commitment to consistently deliver relevant, innovative and timely solutions to our ever growing local and foreign clientele,” Sotubo said.

     

     

  • Stockbrokers woo entrepreneurs on capital market development

    Stockbrokers woo entrepreneurs on capital market development

    Stockbrokers have started wooing indigenous entrepreneurs to the capital market as part of efforts to deepen the  market and enhance its developmental roles in the economy.

    Stockbrokers would be using the platform of the yearly conference of the Chartered Institute of Stockbrokers (CIS), scheduled for October 29 and 30, to discuss  key strategies and ways of enhancing the use of capital market by Nigerian entrepreneurs.

    Addressing capital market reporters on the forthcoming conference, Chairman, Programmes Committee of CIS, Mr Akeem Oyewale, said the Institute has chosen the theme: Entrepreneurship and the Capital market: Fast-tracking a new economy for Africa, in demonstration of the importance of entrepreneurs in the quest to boost activities and reposition the market for global competitiveness.

    According to him, no capital market can thrive without the participation of entrepreneurs who have the capacity to bring their companies for listing on the stock exchanges.

    “It has been proven that our annual conference is a platform for articulating issues that would help the government in its policy planning and implementation. Last year’s conference focused on the entertainment industry and many of the key players in that sector have been utilising the market facilities to expand their businesses.

    “Capital Market is not just about listing alone, there are other windows such as the use of debt instruments to raise fund. We are focusing on the entrepreneurs this year as part of our input towards strengthening the African capital markets. We want to promote entrepreneurs because they occupy a pivotal role in the development of a capital market,” Oyewale said.

    Chairman, Annual Conference Sub-Committee, Mr Wale Agbeyangi, explained that participants for the conference had been carefully selected with emphasis on those who are knowledgeable about issues of capital market development.

    Managing Director, Fortress Capital, Mr Yomi Adeyemi, noted that Africa has many entrepreneurs that can compete globally.

     

     

    “We need to promote our entrepreneurs. As the present administration tries to tackle social problems including unemployment, the roles of entrepreneurs become more glaring. We must encourage our entrepreneurs to come and create more businesses and employ people,” Adeyemi said.

    The conference would be flag-off by the Vice President, Federal Republic of Nigeria, Professor YemiOsinbajo. Other speakers included Mr Akinwunmi Ambode, Executive Governor, Lagos State, Mr Mounir Gwarzo, Director General, Securities & Exchange Commission (SEC), Mr Oscar Onyema, CEO, Nigerian Stock Exchange (NSE); Mr Tony Elumelu, Chairman, Heirs Holdings; Michael Harris, Head of Research and  kurkish Product, Rencap, Mr Bismark Rewane, CEO, Financial Derivatives Company, Mr Peter Bankole, Director, Enterprise Development Centre, Pan African University; Mr Rasheed Olaoluwa, MD, Bank of Industry (BOI) and Ms. Eme Essien-Lore, Country Manager, IFC among others.

     

  • SEC expels stockbrokers over fraud, market manipulation

    The Nigerian Stock Exchange (NSE) has indicted two stockbroking firms and a stockbroker for fraudulent sales of investors’ shares and manipulation of share price at the stock market.

    A circular on the indictment obtained exclusively by The Nation indicated that the stockbrokers were allegedly involved in multi-million Naira shares fraud. The indicted stockbrokers included Fittco Securities Limited, Resort Securities and Trust Limited and Mr Agomuo Chidi Solomon, a trader at the NSE.

    According to the indictment sheet, Fittco Securities Limited’s dealing member license has been revoked and the firm expelled from the Exchange due to alleged unauthorised sales of clients’ shares. Fittco Securities was also directed to pay a fine of N32.37 million.

    Resort Securities & Trust Limited was suspended for one month and directed to pay a fine of N3. 74 million following indictment on alleged share price manipulation.  Agomuo Chidi Solomon, an authorized dealing clerk of the NSE and a broker with Resort Securities, had his dealing certificate withdrawn in relation to the alleged share price manipulation.

    The indictment warned capital market operators from dealing with the indicted stockbrokers, citing rules that blacklisted indicted officials from further operation or employment in the market.

    Article 144(c) of the Rules and Regulations Governing Dealing Members (Amendments and Additions – Part II) – Specific Actions Requiring Prior Consent of The Exchange states that a dealing member must obtain prior written consent of the Exchange to employ directors, authorized clerks or other persons including principal officers such as the chief executive officer, chief finance officer, chief compliance officer and chief risk officer, who have been indicted by the Exchange or Securities and Exchange Commission.

    Others that required clearance from the Exchange before employment included any person who was an officer or employee of a dealing member expelled from the Exchange , any person expelled as an authorized clerk or its equivalent, from any other exchange; any person refused admission as a member of the Chartered Institute of Stockbrokers or any person expelled from its membership; any person expelled as a member of any professional association or institute and any person who is insolvent or has been convicted of theft, fraud, forgery, or any other crime involving dishonesty.

    The Nation had recently reported exclusively that the Economic and Financial Crimes Commission (EFCC) was investigating 10 stockbroking firms and 12 individual stockbrokers and officials as part of a large-scale crackdown on shares fraud that has seen 31 stockbroking firms and several stockbrokers internally investigated and sanctioned by the NSE.

    Two official reports on shares fraud, also known as unauthorised sales of investors’ shares, obtained by The Nation had indicated that the NSE had invited the EFCC to further investigate and prosecute 12 stockbroking firms and 21 stockbrokers and officials, who were primarily indicted by the internal investigations of criminal financial fraud.

     

     

    The EFCC has already concluded investigations and charged two stockbroking firms and nine persons to court while the anti-fraud agency is currently investigating 10 stockbroking firms and 12 persons connected with the firms or individually cited for shares fraud.

    All the cases referred to the EFCC were initially investigated and indicted by the Disciplinary Committee of the Council of the Exchange, NSE’s adjudicatory body which deals with heinous market infractions and investors’ complaints.

    The reports indicated that the all the firms and officials were allegedly indicted by the disciplinary committee for unauthorised sale of investors’ shares while some others were also indicted for issuance of dud cheques, impersonation and illegal conversion of dividend warrants.

    An official of the NSE at the weekend confirmed the cases under investigation by the EFCC, noting that the two reports were up to date and accurately represented the state of affairs as at press time.

    The investigations and prosecutions by the EFCC highlighted the anti-fraud campaign at the stock market to checkmate hard-pressed stockbroking firms and unscrupulous officials, who fiddled with investors’ shares.

    A report on shares fraud over the past 42 months indicated that 31 firms were investigated for unauthorised sale of shares. The report by the NSE covered the period between January 2012 and June 15, 2015.

    The report showed that nearly half of the shares frauds have been completed and the indicted stockbroking firms made to restitute the investors, a general reference to order to buy back the shares or pay the investor the value of the shares and all his entitlements.

    According to the report, 15 stockbroking firms and four individuals have pending cases, although the NSE has taken preemptive measure of suspending the stockbroking firms and stockbrokers. The pending cases have been referred to the disciplinary committee of the council of the NSE.

     

     

     

    The NSE had launched an online whistleblowing portal through which investors and other stakeholders can tip off the Exchange on perceived or known infractions. The online portal, known as X-Whistle, allows members of the public to submit information without disclosing their identity while it also provides reference that allows the whistleblower to track NSE’s response and investigation on the tip off.

     

     

     

     

  • SEC advises investors on choice of stockbrokers, others

    Securities and Exchange Commission (SEC) has advised investors to check the regulatory status of any capital market operator before entering into new business relationships or sustaining existing ones with a view to ensuring that they are dealing with duly authorized and compliant operators.

    SEC, through the market-wide Implementation Committee on new minimum capital requirement for capital market operators, said investors should verify the compliance status of capital market firms by checking the list posted on the Commission’s website. To facilitate the smooth implementation of the new minimum capital requirements for operators, the Capital Market Committee-the umbrella body for capital market stakeholders under the coordination of SEC, had set up a market-wide “Implementation Committee on New Minimum Capital Requirement” comprising the SEC, Nigerian Stock Exchange (NSE), Central Securities Clearing System (CSCS), Association of Stockbroking Houses of Nigeria (ASHON) and all other capital market trade groups.

    The advice came on the heels of the expiration of the September 30, 2015 deadline and the publication of the provisional list of capital market firms that have met the new minimum capital requirements for their functions by the apex capital market regulator at the weekend.

    As a guide for investors with non-compliant firms and those seeking to change from one firm to another, the Commission outlined the guidelines that should be adhered to by investors, target firms and the Central Securities Clearing System (CSCS) where an investor wishes to move his stock account from an under-capitalised broker-dealer to a broker-dealer or broker that has complied with the minimum capital requirement.

    The procedure for moving stock accounts include where the broker-dealer has not met the new minimum capital requirement, the investor should approach a capitalised broker-dealer or broker for engagement. The investor should undergo a Know Your Customer (KYC) process with the new firm. The broker-dealer or broker should open a CSCS account for the investor using the investor’s existing Clearing House Number (CHN) from his former Brokerage Firm. The investor should give a mandate to the target firm to transfer his account from the under-capitalised firm to the new firm.

    Also, the investor would be required to submit evidence of purchase of the shares such as contract notes, receipts of purchase, dividend stubs or confirmation of holdings from the registrar’s office, signed by the managing director of the Registrar firm to the target firm. The new target firm would initiate inter-member transfer request with the managing director of the firm expected to go to the CSCS to sign off the indemnity form. Then, the CSCS shall process the request and notify the broker-dealer or broker through the CSCS website.

     

     

     

     

  • Stockbrokers seek extension of recapitalisation deadline

    Stockbrokers seek extension of recapitalisation deadline

    Stockbrokers at the weekend called for extension of the deadline for compliance with the new minimum capital requirements for capital market operators introduced by the Securities and Exchange Commission (SEC) and the Minimum Operating Standards (MOS) being implemented by the Nigerian Stock Exchange (NSE).

    Acting President, Chartered Institute of Stockbrokers (CIS), Mr. Oluwaseyi Abe, said both SEC and the NSE should take into consideration the downtrend in the stock market and investors’ apathy in the primary market, which have militated against several market operators.

    He said while the objective of capitalisation and the MOS is laudable, regulatory authorities should show concern and take another look at the timing in order to further encourage inclusive development of the market.

    “The regulatory authorities should give people more time, the market is down, people need more time to comply,” Abe said.

    He reiterated the commitment of the stockbrokers to further deepening and development of the capital market, noting that the CIS has been implementing various initiatives to enhance standards of operations in the market and investors’ confidence in the integrity of the market framework.

    SEC had late 2013 announced major increases in minimum capital requirements for capital market functions under a new minimum capital structure that was initially scheduled to take off by January 1, 2015. It, however, extended the deadline to September 30, 2015.

    Minimum capital base for broker and dealer was increased by 329 per cent from  N70 million to N300 million. Broker, which operates with capital base of N40 million, will now be required to have N200 million, representing an increase of 400 per cent. Minimum capital base for dealer increased by 233 per cent from N30 million to N100 million.

    Also, issuing houses, which facilitate new issues in the primary market, will be required to have minimum capital base of N200 million as against the capital base of N150 million. The capital requirement for underwriter also doubled from N100 million to N200 million. Trustees, rating agencies and portfolio and fund managers had their minimum capital base increased by 650 per cent each from N40 million, N20 million and N20 million to N300 million, N150 million and N150 million respectively. A  Registrar will now have a minimum capital base of N150 million as against the current requirement of N50 million. While the minimum capital base for corporate investment adviser remained unchanged at N5 million, individual investment advisers will have to increase their capital base by 300 per cent from N500,000 to N2 million.

    SEC last week drew the curtain on a preliminary deadline for capital market operators to file notifications for mergers and acquisitions or any reclassification of their functions. SEC had initially given a deadline of July 31 for the market operators to formalise any business combination and reclassification and file the necessary information with the apex capital market regulator. The Commission later extended the deadline to August 31, 2015.

    In a July 4 circular to capital market firms, the apex capital market regulator directed all capital market operators which might have opted for mergers, acquisitions or any other form of business combination as a vehicle to meet the new minimum capital requirements to file their notifications with the Commission not later than July 31, 2015.

     

     

    The directive also applied to capital market operators proposing reclassification or reduction of their registered functions, including those seeking to downsize from stockbroker to sub-broker, broker-dealer to either broker or dealer and from multiple functions to a single function among others.

    The MOS requirements were introduced last year by the management of the Exchange. The MOS requirements relate to all the dealing members of the Exchange and they address the five broad areas of manpower and equipment; organizational structure and governance; effective processes; global competitiveness; and technology.

    The NSE has insisted that the main objective of the MOS programme is to enhance investors’ protection and the integrity of the secondary market by ensuring that operators have adequate resources for professional and globally competitive operations.

    The SE had also given stockbroking firms July 31, 2015 deadline to submit a status verification report on the functions that their resources may be able to cope effectively with, in an indirect reclassification that may lead to withdrawal and issuance of new licences.

    In a circular to all stockbroking firms, the NSE directed the stockbroking firms to submit notification report that should state the capacity that each firm desires to operate in the market on or before July 31, 2015.

    Stockbroking firms are expected to choose from the four categories of operations including broker-dealer, the highest level; broker, the second level; dealer, the intermediate level and sub-broker, the lowest level similar to investment agent to without any trading privileges.

    SEC has repeatedly ruled out any further extension of the September 30, 2015 deadline for all capital market operators to comply with the new minimum capital requirements for their functions.

    The apex capital market regulator had stated that all capital market operators who are yet to comply with the new minimum capital requirement must do so before the deadline of September 30, 2015.

     

     

  • Stockbrokers to partner AfDB on national, continental devt

    Stockbrokers to partner AfDB on national, continental devt

    STOCKBROKERS, who form the bulk of operators and the main link at the capital market, have outlined areas of mutual interests for collaboration with the new management of the African Development Bank (AfDB).
    Stockbrokers, under the aegis of the Chartered Institute of Stockbrokers (CIS), said the partnership between the CIS and the AfDB could provide much-needed linchpin for the development of the continent, especially Nigerian agricultural sector.
    Under the new plan, the two institutions are to work together in ensuring the viability of the commodities market and listing of agro-allied companies to boost activities in agriculture in line with the Federal government’s plan to diversify income base by shifting attention from oil.
    Addressing capital market correspondents at the weekend, acting president, Chartered Institute of Stockbrokers (CIS), Mr. Oluwaseyi Abe congratulated the newly appointed president of AfDB, Dr. Akinwumi Adesina, noting that the CIS had been working closely with Adesina during his tenure as Nigeria’s Minister of Agriculture.
    He pointed out that both the CIS and AfDB had many things in common, especially in the areas of creating awareness on the benefits of promoting active commodities exchange and the listing of companies in the agro allied industry.
    “We need active and transparent commodities exchange in order to develop our agricultural sector as a huge source of income rather than depend on crude oil. This is in tandem with the Federal Government Policy of diversification of the economy. The agro allied companies require standardization of products and effective pricing mechanism to thrive. The CIS trains manpower in this regard,” Abe said.
    According to him, other areas of partnership with AfDB include listing of power related institutions to access capital through the various relevant market platforms, and partnership with CIS for empowerment on its Diploma Programme to create employment and support financial inclusion programme of the government, especially into the rural communities.
    “The CIS is willing to engage AfDB on how we can harmonise our Diploma Programme. The ultimate is to empower the holders of our Diploma to create employment and enhance the government’s financial inclusion programme especially into the rural communities,” Abe said.
    He noted that the focus of the institute’s professional diploma was not only to grow membership but develop a new generation of entrepreneurs who would become foot solders in the various sectors of the financial market.
    Abe announced that the Institute’s 2015 Annual Conference of Stockbrokers would hold on October 29 and 30 with the theme: “Entrepreneurship and the Capital Market: Fast Tracking a New Economy for Africa.”
    In his remarks, second vice president, Chartered Institute of Stockbrokers (CIS), Mr. Dapo Adekoje reiterated the plan to deepen the market through effective operation of the commodities exchange.
    Registrar and Chief Executive, Chartered Institute of Stockbrokers (CIS), Mr. Adedeji Ajadi added that the professional diploma was already generating interest in the public as many youths are now writing the examination.