SEC cautions capital market operators on illegal collection of fees

Brokers, issuing houses/book runners, receiving agents and other operators in the primary and secondary market segments of the Nigerian  capital have been put on notice to desist from whatever unethical conduct that threatens the integrity of the system or face stiff sanctions.

The Securities and Exchange Commission (SEC), in a statement, said its attention has been drawn to an emerging trend of unethical conduct by Brokers, Issuing Houses/Book Runners and other Receiving Agents in primary and secondary market transactions which must be checked.

The regulator warned operators in the capital market to desist from such unethical practices that could lead to strict regulatory actions in accordance with the extant rules and regulations governing the market.

In its statement, SEC noted that the concerned operators have been inducing investment through the sharing of brokerage fees or receiving agent’s commission with private banking officers, asset/fund managers, Pension Fund Administrators and other classes of institutional investor who are not duly registered or recognized by the Commission as being eligible to receive commission.

The Commission said only capital market operators duly registered by it are eligible to be paid brokerage fee/receiving agents’ commission and such operators shall not pay or offer a percentage of the commission earned from services provided in a transaction as an incentive for investment.

“Any capital market operator found to engage in this practice or similar acts shall be subject to strict regulatory actions in accordance with the rules and regulations of the Commission,” the regulator said and urged the public  to exploit the Commission’s whistle blowing mechanism to provide information on any known or suspected cases for necessary action.