Over N1 trillion Investors' funds threatened as SEC introduces new rule

As confirmed by SEC, Nigeria’s apex capital market regulator, this new rule on clients’ identification would stop existing investors that have not updated their details from using the already open accounts and also stop new investors from opening new accounts.

Some of the mandatory information stockbrokers are required to produce under the enhanced identification framework include their clients’ bank account details and a recognized identification number from the Nigerian government like the Bank Verification Number (BVN) or National Identification Number (NIN).

Failure to make these items available will halt trading as investors who do not have a complete three-layered identity would be made to lose access to the portal.

SEC also added that the aim of the new client identification is to harmonize transactions with the government’s national register.

With more than N1 trillion threatened in the fresh traders' review, the implementation of the new rules would affect several existing accounts.

Further details from market sources also revealed that defaulting accounts with even the slightest identification errors or without owners’ bank details would face a blanket ban which would further deepen the crisis of inaccessible funds in the market.

Last month, SEC announced that the body has been besieged with issues concerning a backlog of unclaimed share certificates and unclaimed dividends amounting to N 177 billion.

The main cause of this crisis was traced to irregularity in identities, a threat the body was determined to phase out with the new identification policy.

Meanwhile, the Self-Regulatory Organization (SRO) the body that regulates activities at the Nigerian Exchange (NGX), has announced Tuesday, October 4, 2022, as the date of commencement of the implementation of the identification framework for the stock market.