The Nigerian House of Representatives on Thursday passed a bill seeking to annul the Investments and Securities Act (ISA) 2007 and enact the Investments and Securities Act for second reading.
The bill sponsored by Babangida Ibrahim seeks to make Securities and Exchange Commission (SEC) the apex regulatory authority for the Nigerian capital market.
It also empowers the SEC to shut down all illegal investment schemes and prescribes a 10-year jail term for Ponzi scheme operators.
In his submission during plenary on Thursday, Ibrahim said it is imperative to review the Investments and Securities Act, Act No. 29 of 2007, due to the current trends in the capital market.
According to him, “There are new provisions on the regulation of Financial Market Intermediaries (FMIs) such as Central Counter Parties (CCPs), Clearing Houses, Trade Depositories etc.
“The general law of insolvency would have no effect on market contracts or action taken under the rules of an exchange, FMI with respect to market contracts, or an action taken to transfer any collateral.
“Furthermore, no entity, trade association can operate or hold itself out as a Self Regulatory Organization (SRO) unless recognised or registered as such by SEC. The responsibilities of SRO are also well spelt out, while a new provision has been introduced on netting of financial contracts.”
We are enhancing provisions relating to efficient regulation of investment schemes. Recently there is a lot of complaints by Nigerians to the extent the Federal Government itself put some embargo on some accounts of Ponzi schemes. So as of the time of signing the current account, the Ponzi scheme was not in existence in Nigeria. So we have to put some regulations to monitor them.”
