The Securities and Exchange Commission (SEC) has a new announcement. It directed existing investment crowdfunding portals and digital commodities investment platforms to register with the commission. The platforms either register or cease operations by June 30.
They are also expected to apply for registration not later than 90 days from the effective date. If this is not done, they risk being identifies as illegal.
The commission said the rules were part of efforts by the SEC to ensure investors’ protection. At the same time encouraging innovation in the conduct of securities business.
The New SEC Rules & Regulations is listed below:
RULE ON REGULATION OF FUND MANAGEMENT PRODUCTS
(1) No person or entity shall operate any product that pools investors’ monies, including discretionary or non-discretionary portfolios/funds except such person or entity is registered as a fund/portfolio manager.
(2) No fund/portfolio manager shall develop and operate any product, discretionary or nondiscretionary portfolio/fund without the Commission’s prior approval or ‘no objection’.
(3) No fund/portfolio manager shall advertise, market or attract investors to the existence of any product, discretionary or non-discretionary portfolio/fund other than registered collective investment schemes.
(4) Every fund/portfolio manager shall submit quarterly returns and annual reports in respect of all products, discretionary or non-discretionary portfolios/funds, in a form as determined by the Commission.
(5) Any person or entity that contravenes this rule shall be liable to any one or more of the following sanctions –
- A penalty of not less than ₦500,000 (Five hundred thousand naira) and a further sum of N10,000 (Ten thousand naira) for every day the violation continues in respect of each product, discretionary or non-discretionary fund/portfolio under management;
- Suspension of registration;
- Withdrawal of registration;
- Disgorgement of proceeds/income from the product, discretionary or nondiscretionary portfolio/fund;
- Any other sanction the Commission deems fit in the circumstance.