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SEC Warns Against Trading Stocks Via Bamboo, Trove, Others

By Dipo Olowookere

The Securities and Exchange Commission (SEC) has warned members of the public, especially investors in Nigeria, against buying or selling stocks through online investment and trading platforms like Bamboo, Chaka, Trove, amongst others.

In a statement issued on Thursday, April 8, 2021, the agency explained that it gave out this warning because these platforms are not authorised to trade stocks in Nigeria.

The apex regulator in the Nigerian capital market, therefore, cautioned licenced capital market operators (CMOs) against associating with these platforms because they could be sanctioned.

In the notice, SEC described the activities of the affected organisations as illegal because they have not been authorised to trade shares, either foreign or local.

The likes of Bamboo, Trove, Chaka allows residents of Nigeria to trade foreign stocks, especially those listed in the United States, through their trading platforms.

But SEC said if they must carry out this function, their organisations must be duly registered as stipulated in Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations.

“The attention of the Securities and Exchange Commission (the Commission) has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on Securities Exchanges registered in other jurisdictions.

“These platforms also claim to be operating in partnership with Capital Market operators (CMOs) registered with the commission,” a part of the statement said.

“The commission categorically states that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public.

“Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the commission’s position and advised to desist henceforth,” it added.

“The commission enjoins the investing public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums,” it concluded.

Recall that last December, the Investments and Securities Tribunal (IST) prohibited Chaka from using its platform to trade stocks for investors in the Nigerian capital market until it is permitted to do so.

The directive followed a suit filed by SEC, which said the organisation was not authorised to carry out such activities in the country because it was not licenced.

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