Stock exchange purge: 88 stock market operators may lose licences

Nearly one-third of registered stockbroking firms on the Nigerian Stock Exchange (NSE) may lose their dealing licences in a massive purge expected to kick-start today (Monday) as Nigeria’s only stock exchange begins implementation of new rules.

Ripples.com.ng confirmed at the weekend that some 88 dealing licences may be withdrawn by the authorities at the Exchange under new rules that tie continued membership of the Exchange to minimum period of trading activity.

A new rule on the revocation of dealing licences and expulsion of inactive stockbroking firms comes into effect today. The resultant withdrawal of the licences will be the biggest in the history of the Exchange. The NSE had only in the past revoked 13 licences.

A circular by the NSE obtained by Ripples.com.ng stated that the Exchange would begin the implementation of the new rules and amendments on revocation of dealing licences with effect from June 29.

The new rules stipulate that where a dealing member is inactive for a period of six consecutive months, the Exchange shall revoke the license of the dealing member.

“Under no circumstances shall a dealing member cease to carry out its day to day business activities for which it was licensed to operate without any reasonable cause,” according to the rules.

A dealing member may become inactive voluntarily or involuntarily. Voluntary inactivity occurs where the firm has not recorded any trading activity without being suspended by the Exchange or SEC. Involuntary inactivity occurs where the firm has been suspended by the NSE or SEC for any infraction.

As against voluntary inactivity which comes with summary commencement of the revocation process, where a firm has been involuntarily inactive for the stipulated period of six months, the Exchange shall exercise its discretion in determining whether to revoke the firm’s dealing licence.

“Where the Exchange revokes a dealing member’s license, The Exchange shall immediately commence the process of expelling such dealing member,” the rules stated.

The circular authorizing the commencement of the implementation was signed by the head of legal and regulations department at NSE, Tinuade Awe. The rules had been approved by the Securities and Exchange Commission (SEC) in February 2015 but the Exchange delayed the implementation.

A status report at the weekend also indicated that the NSE has already determined 88 out of the 308 stockbroking firms on its dealing members’ list as inactive. According to the report, out of 308 existing stockbroking licences, 220 are active while 88 are inactive.

A summary of the inactive licences include 50 firms without activities which fall under voluntary inactivity, 20 dealing firms that were deregistered by SEC and which fall under involuntary inactivity and 18 licences that had been dormant and were not activated since issuance, which will also fall under voluntary inactivity.

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The list of the inactive stockbroking firms which licences may be revoked include:

Northbridge Investment & Trust Limited, Omas Investment & Trust Company Limited, Peninsula Asset Management & Investment Company Limited, Platinum Capital Limited, PML Securities & Company Limited, Professional Stockbrokers Limited, Profund Securities Limited, Prudential Securities Limited, Regency Finance Limited, Securities Solutions Limited, Securities Trading & Investments Limited, Shalom Investment & Financial Services Limited, Supra Commercial Trust Company Limited, Surport Services Limited, Vision Trust & Investment Limited, Waila Securities and Funds Limited, Wema Asset Management Limited, WizeTrade Capital & Asset Management Limited, WT Securities Limited, Zuma Securities Limited, AAA Stockbrokers Limited, Alliance Capital Management Company Limited, BFCL Asset & Securities Limited, BIC Securities Limited, Aims Asset Management Limited, Allbond Investment Limited, Arian Capital Management Limited and Bauchi Investment Corp. Sec Limited.

Others are Bytofel Trust & Securities Limited, Cadington Securities Limited, CEB Securities Limited, Consolidated Investment Limited, Dakal Services Limited, Davandy Finance & Securities Limited, Decanon Investment Limited, Emi Capital Resources Limited, Empire Securities Limited, Falcon Securities Limited, First Alstate Securities Limited, Fittco Securities Limited, Gombe Securities Limited, HIP Asset Management Limited (Formerly Kakawa Asset Mgt Ltd), International Standard Securities Limited, ITIS Securities Limited, LB Securities Limited, Lion Stockbrokers Limited, LMB Stockbrokers Limited, Mact Securities Limited, Maninvest Asset Management Plc, Maven Asset Management Limited, Metropolitan Trust Nigeria Limited, Midpoint Capital Limited, ML Securities Limited and Monument Sec & Finance Limited.

Also included are Afro-Arab Investment Limited, Al-pina Investment & Trust Co. Limited, Barakat Investment Limited, BBL Asset Mgt Limited, Bosson Capital Assets Limited, Dealers Assets Management Limited, Enabell Capital & Investment Limited, First & Foremost Investment Limited, First Express Limited, GilJohn Capital Limited, Integrated & Allied Securities Limited, KFF Worldwide Solutions Limited, Kingdom Securities Limited, MultiTrust Securities Limited, Silver & Gold Securities Limited, Standard Chartered Securities Limited, Trans Lux Services Limited and Truebond Capital & Asset Mgt Limited and Colvia Securities Limited.

Others include Epic Investment Trust Limited, Equator Stockbrokers Limited, First Atlantic Securities Limited, First Equity Securities Limited, Folu Securities Limited, Genesis Securities & Investment Limited, Ideal Securities Limited, Indemnity Finance Limited, Midland Capital Markets Limited, Midlands Investment & Trust Limited, RIV Trust Securities Limited, Riverside Trust Limited, Sikon Securities and Investment Trust Limited, Transglobe Investment & Finance Company Limited and Tropics Securities Limited.

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