Disciplinary Hearing Begins on Six Stockbroking Firms

The national council of the Nigerian Stock Exchange (NSE) would this week begin a disciplinary hearing on the fate of inactive, illiquid and delinquent stockbroking firms with the first batch of the affected operators expected to appear before the council on Thursday.

The Disciplinary Committee of the National Council of the NSE has invited six stockbroking firms to appear before it on Thursday to explain why the Exchange should not take disciplinary action against them for failing to activate their dealing member licenses.The affected companies included Al-Pina Investment and Trust Company Limited, BBL Asset Management Limited, Integrated and Allied Securities Limited, MultiTrust Securities Limited, Standard Chartered Securities Limited and Trans Lux Services Limited.

In a notice signed by head, legal department and council secretariat, Irene Robinson-Ayanwale, the NSE indicated that the six stockbrokers were part of a group of stockbrokers that it had earlier queried over their operating status.

The disciplinary committee is expected to determine the propriety of the dealing licenses of the affected members at the hearing.

The NSE had in December 2013 commenced a process to determine the propriety of dealing licence of 53 stockbroking firms, a development that may lead to withdrawal of operating licence of erring stockbroking firms.

A query by the management of the NSE to the 53 stockbroking firms directed the stockbroking firms to show reasons why disciplinary actions should not be taken against them for failure to regularize their operating status and other sundry outstanding regulatory issues.

The query was signed by head, broker dealer regulation, Nigerian Stock Exchange (NSE), Mr. Olufemi Shobanjo.

A source in the know of disciplinary process of the NSE indicated that the Exchange may withdraw the operating licence of some of the stockbroking firms, which failed to provide tangible reasons to show liquidity, continuous operations and compliance with extant rules on dealing member firms.

Checks showed that most of the queried firms had in September 2013 been suspended for failure to comply with extant operating rule that requires all stockbroking firms to establish compliance department and appoint accredited compliance officers. The suspension by the NSE implies that they will not be  allowed to trade at the stock market or act in any issue relating to the capital market, especially as it relates to regulatory approval of the NSE.

The latest query on regularization of operating status also referred to “all outstanding regulatory issues”, indicating a build-up of the case against the stockbroking firms.

The queried dealing member firms included Mainstreet Bank Securities Limited, Standard Chartered Securities Limited and First Atlantic Securities Limited, three brokerage firms owned by banks.

Other queried firms included AAA Securities Limited, Alliance Capital Management Company Limited, Al-pina Investment & Trust Company Limited, BBL Asset Management Limited, BFCL Asset & Securities Limited, BIC Securities Limited, CEB Securities Limited, Colvia Securities Limited, Consolidated Investment Limited, Dakal Services Limited, Decanon Investment Limited, Empire Securities Limited, Enabell Capital & Investment Limited, Epic Investment Trust Limited, Equator Stockbrokers Limited, First Equity Securities Limited, First Express Limited, Folu Securities Limited, Genesis Securities & Investment Limited, Ideal Securities Limited, Indemnity Finance Limited, Integrated & Allied Securities Limited, KFF Worldwide Solutions Limited, Kingdom Securities Limited, Lion Stockbrokers Limited, LMB Stockbrokers Limited, Maninvest Asset Management Plc, Mayfield Investment Limited, Metropolitan Trust Nigeria Limited, Midland Capital Markets Limited, Midlands Investment & Trust Limited and ML Securities Limited.

Others included Monument Securities & Finance Limited, MultiTrust Securities Limited, Omas Investment & Trust Company Limited, Peninsula Asset Management & Investment Company Limited, Platinum Capital Limited, Professional Stockbrokers Limited, Prudential Securities Limited, Regency Financing Limited, RIV Trust Securities Limited, Riverside Trust Limited, Securities Trading & Investment Company Limited, Sikon Securities and Investment Trust Limited, Trans Lux Services Limited, Transglobe Investment & Finance Company Limited, Tropics Securities Limited, Truebond Capital & Asset Management Limited, WT Securities Limited and Zuma Securities Limited. Culled from Brandwagon/The Nation. {fcomments}