SEC cautions patrons of Ponzi schemes

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Securities and Exchange Commission (SEC) has warned the investing public against dealing with unregistered schemes and illegal operators and promoters of ponzi schemes.

In a circular, the Commission advised the public to exercise utmost caution and conduct adequate due diligence on the status of operators and investment schemes to ensure they are duly registered before entering into any transaction with such operator. The list of registered operators and investment schemes are on the website of the Commission.

According to the Commission, Section 38(1) of the Investments and Securities Act, 2007 requires any person who intends to operate as a professional in the capital market or carry on securities business to be registered by the Commission before engaging in such activities.

“It is therefore illegal to carry on any kind of capital market business without registration or to patronize such person. In view of the above, the general public is hereby warned that any person dealing with any such persons in any capital market or investment related business is doing so at his or her own risk,” SEC stated.

The Commission noted that while it is under a duty to protect investors, such duty does not include recovering funds for investors who against reason and public notices invest in products promoted by unregistered and unregulated entities.

SEC reiterated its commitment to work with law enforcement agencies to bring promoters of such illegal schemes to book.

Meanwhile, the Commission has advocated for some fiscal incentives for quoted companies on the Nigeria Stock Exchange (NSE) in order to reduce their costs and encourage more companies to list shares on the stock market.

SEC Acting Director-General, Ms. Mary Uduk, noted that apart from reduction of costs, fiscal incentives will translate to huge investment benefits to shareholders and further position quoted companies to contribute more to national development through improved capacities and job creation.

She added that creating some form of fiscal incentives for listed entities will add further mileage to ongoing efforts to improve corporate governance in the country

“Our case for fiscal incentives for listed companies on the NSE is actually based on experience. What we are saying is that Nigerian companies doing the same business these foreign companies are doing if they are listed should be encouraged in terms of public procurement or whatever government is doing.

We don’t want to keep taking from them because they incur a lot of cost and you cannot reduce the cost more than a limited amount of percentage. The best is to begin to give them some incentives and with that you have more companies coming to the market, you have more jobs and then people will have dividends of investing,” Uduk said.

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