By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The Nigerian Stock Exchange (NSE) on Wednesday said its seeking to henceforth revoke licences of dealing members firms that had remained inactive for six (6) consecutive months.
The NSE said the move is in a bid to maintain the integrity of the capital market and further protect investors in Nigeria.
According to the Nigeria’s Exchange, the intention is being pursued through a Securities and Exchange Commission (SEC) approved rule that authorises the NSE to revoke the dealing member licences of such inactive firms.
The SEC approved rule provides that where a dealing member firm is inactive for six (6) consecutive months, The Exchange shall revoke its licence.
The NSE affirmed that the circumstances of the inactivity are further categorised into voluntary and involuntary inactivity.
Tinuade Awe, head, legal and regulation division at the Nigerian bourse, explained that voluntary inactivity occurs where the dealing member firm has not engaged in any trading activity for a consecutive period of six (6) months without being suspended by NSE or SEC.
Awe said the rule provides further that NSE shall forthwith revoke the licence of any dealing member firm that falls into this category.
On the part of involuntary activity, she affirmed that this occurs where a dealing member firm has been suspended from trading activities by NSE or SEC by reason of any infraction committed by that dealing member firm and it has not carried out any trading activity within the stipulated six (6) months period.
“The powers of The Exchange under this SEC approved Rule will be exercised judiciously and will take into account all the circumstances surrounding each individual case as well as the interests of all stakeholders, particularly the investors,” Awe said.
She observed that majority of the prohibited practices in the market have been linked to inactive firms and so it is important to stress that the new rule is aimed at further sanitising the market to protect investors.
On his part, Olufemi Shobanjo, head, broker dealer regulation at the NSE mentioned that the NSE in exercising its regulatory authority over dealing member firms shall continue to use the utmost care and diligence.
‘’The NSE is keen to entrench the required catalysts to stimulate and build a healthy and well regulated market so as to stimulate increasing levels of investor confidence in the market,’’ Shobajo said.
