In an try to cut back the demand for international shares in Nigeria, the Securities and Exchange Commission (SEC) is proposing tighter and stricter regulatory oversight and necessities for international stockbrokers within the nation.
In an interview monitored by Nairametrics, the manager commissioner for operations of the SEC, Dayo Obisan revealed the fee was planning to actively monitor the native facilitators of international shares.
“At least 400,000 Nigerians have invested in foreign stocks through brokers in the past 18 months,” Obisan said, with Nigerians actively buying and selling or holding international equities now exceeding these investing within the native market and about 70% of those contributors being lower than 40 years of age.
This is regardless of the Nigerian Stock Exchange being dubbed the most effective performing final yr after it gained 50% YTD. Stocks are nonetheless down 5% YTD.
In distinction, the S&P 500 Index is at present buying and selling 14.50% YTD, creating a brand new all-time excessive.
Also, the worth of transactions is down YTD as demand shifts from the Nigerian inventory change market to the Cryptocurrency and international inventory market.
“There is an increasing interest among the younger population and this is of concern to the commission primarily because it creates an avenue for exploitation,” Obisan mentioned.
The SEC intends to license companies providing international shares underneath a “digital sub-broker” regulation, which Obisan says ought to present a type of readability to their actions.
He additionally said the requirement will guarantee “regulatory responsibilities in on-boarding clients, custody of assets, and compliance with reporting requirements are met”.