The Security and Exchange Commission (SEC) has declared operations of some Nigerian fintech platforms including Chaka, Trove, Bamboo, and Risevest as illegal, saying the platforms allow Nigerians to trade and invest in stocks listed on the Nigerian foreign stock exchanges without necessary registrations. The commission disclosed this in a statement issued on Thursday, explaining that “The attention of the Securities and Exchange Commission (the Commission) has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on Securities Exchanges registered in other jurisdictions.
“These platforms also claim to be operating in partnership with Capital Market operators (CMOs) registered with the Commission.”
The commission added that under the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold, or offered for sale or subscription to the Nigerian public.
“Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.
The Commission enjoins the investing public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.”
Co-founder and CEO of Chaka Technologies, Tosin Osibodu has assured users of the platform that the company is taking necessary steps to register with the commission.
“At Chaka, we have always maintained a strict commitment to compliance. From inception, we made it imperative that all equities available through Chaka’s app are offered through regulated parties like Citi Investment Capital Limited (CICL) and others who are licensed by the Nigerian SEC and other financial regulators.
“We are pleased to inform our stakeholders and the general public that Chaka has taken the necessary steps to register with the Securities & Exchange Commission of Nigeria (SEC) for a newly created license, as SEC continues to maintain its avowed intention to encourage innovation within the market space.”
While, Richmond Bassey, CEO of Bamboo also said the fintech company is in discussions with SEC to address the issue, assuring users that their assets are safe and easily accessible.