SEC Begins New Investors’ Identification Regime

Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), will on April 1, begin enforcement of a new investors’ identification regime aimed at enhancing transparency in the capital market and forestall the recurring incidence of unclaimed dividend.

In a circular, the apex regulator stated that no transactions will be effected on any existing investor’s account without updated and validated information as required under the approved know-your-customer (KYC) format for the market. Any stockbroking firm that trades on any such incomplete account shall be sanctioned, according to the Commission.

SEC directed stockbrokers to capture full information in respect of new clients and update information of their existing clients. The required information include bank account details, bank verification number (BVN), telephone number and email address.

“Such information should be validated against the Nigerian Interbank Settlement Systems Limited (NIBSS) BVN validation portal. Brokers should update their Order Management System to enable the system flag off accounts with incomplete KYC information,” SEC stated.

According to the Commission, the clearing house for the stock market, the Central Securities Clearing System (CSCS) should an editable format of lists clients with incomplete records to stockbrokers for them to update and return such to CSCS.

The apex regulator mandated the CSCS to ensure transmission of full information to the registrars following transactions while registrars must ensure that new or updated shareholders information transmitted to them are properly captured in the relevant company’s register of members.