NSE Revokes 11 Stock Broking Firms Licenses

Regulators
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November 14, 2012/ IHEANYI NWACHUKWU/ Businessday

Eleven stockbroking firms at the Nigerian Stock Exchange (NSE) have had their licenses revoked, according to the status of Dealing Member Firms, as at 30th September 2012. As at that date, only 242 stockbroking firms operated at the market with active licenses.

According to the BrokersTrak’ at the NSE, the stockbroking firms whose licenses have been revoked since September 30, are Apex Securities Limited, Asset Plus Securities Limited, Beachgroove Securities Limited, Broadeage Securities Limited, IMB Morgan Plc, Jenkins Investment Limited, Prudent Stockbrokers Limited, Source Finance & Trust Limited, Thomas Kinsley Securities Limited, Viva Securities Limited, and HALSEC Finance & Securities Limited.

Responding to BusinessDay enquiries on this development, Olufemi Shobanjo, head, broker-dealer regulation, Nigerian Stock Exchange said “the management of the Nigerian Stock Exchange does not revoke licenses of dealing member firms without the approval of the Council”.

Analysts BusinessDay spoke to, say that Shobanjo’s comments suggest that the actions of the NSE in revoking those licenses, was taken after the approval of the Council, because it is only the Council that can approve revocations.

Commenting on the development, Emeka Madubuike, president, Association of Stockbroking Houses of Nigeria (ASHON) said almost all the stockbroking firms whose licenses have been revoked, “have been dead for 10 years, if not more. To me, what the NSE is doing is cleaning up their books because most of these firms whose licenses are revoked have been out of operation for 10 years or even more.”

Madubuike advised that the revocation of stockbrokers licenses needs council members decision, “I am also believing that the NSE management would have advised the Council. You need to ask the NSE whether they did so.”

He added: “What I think the NSE is doing is to clean-up their books. It is a normal process but it is important that the formal process be followed. What the NSE is doing is right, to inform the investing public on stockbrokers’ status at the NSE. On your own side at BusinessDay, it is your role to let the public know all these developments.”

In addition, the ‘BrokersTrak’ showed that 45 stockbroking firms have inactive licenses, while 24 have unactivated licenses, noting “The Nigerian Stock Exchange, in its bid to improve investors’ confidence in the market, has commenced a strong campaign against market infraction by its dealing members. Investors can now make more informed decisions about where to invest by viewing names of Dealing Member Firms that have been found liable for contravening market rules. ​The aim of the NSE is to reduce contravention of market rules to the barest minimum, while doing all within its means to restore confidence.”

Looking further into the ‘BrokersTrak,’ our checks showed the stockbroking firms with inactive licenses, as at last count (September 30) include AAA Securities Limited, Adamawa Securities Limited, Afribank Securities Limited, Alliance Capital Management Company Limited, BIC Securities Limited, CEB Securities Limited, Colvia Securities Limited, Consolidated Investment Limited, Dakal Services Limited, Dependable Securities Limited, Empire Securities Limited, Epic Investment Trust Limited, and Equator Stockbrokers Limited.

Others are Express Discount Asset Management Limited, First & Foremost Investment Limited, First Atlantic Securities Limited, First Equity Securities Limited, Folu Securities Limited, Genesis Securities & Investment Limited, Ideal Securities Limited, Indemnity Finance Limited, Lion Stockbrokers Limited, Metropolitan Trust Nigeria Limited, Midland Capital Markets Limited, Midlands Investment & Trust Limited, ML Securities Limited, Monument Sec & Finance Limited, and Omas Investment & Trust Company Limited.

The ‘BrokersTrak’ currently in the Broker-Dealer Regulations department of the Nigerian Stock Exchange indicated that “an inactive firm is a firm that has been suspended for a period of more than six-months by The Exchange or Securities and Exchange Commission (SEC); or has not recorded any activity for a period of three or more months, without being suspended.”

Other stockbroking firms that have inactive licenses are Platinum Capital Limited, Professional Stockbrokers Limited, Regency Financing Limited, RIV Trust Securities Limited, Riverside Trust Limited, Securities Trading & Investment Company, Sikon Securities and Investment Trust Limited, and Supra Commercial Trust Company Limited.

Others are Transglobe Investment & Finance Company Limited, Tropics Securities Limited, Vision Trust & Investment Limited, Wema Asset Management Limited, WT Securities Limited, Zuma Securities Limited, BFCL Asset & Securities Limited, Decanon Investment Limited, and Securities Solutions Limited.

The dealing member firms with unactivated licenses, named by the NSE, as at the last count are African Alliance Stockbrokers Limited, Enabell Capital & Investment Limited, Afro-Arab Investment Limited, Al-pina Investment & Trust Company Limited, Barakat Investment Limited, BBL Asset Mgt Limited, Bosson Capital Assets Limited, CDL Capital Markets Limited, Dealers Assets Management Limited, Edgefield Capital Management Limited, First Express Limited, GilJohn Capital Limited, and Integrated & Allied Securities Limited.

Others are KFF Worldwide Solutions Limited, Kingdom Securities Limited, Mc-Finerco Investment Limited, Merit Securities Limited, MultiTrust Securities Limited, Ocean Securities & Stockbrokers Limited, Royal Guaranty & Trust Limited, Silver & Gold Securities Limited, Standard Chartered Securities Limited, Trans Lux Services Limited, and Truebond Capital & Asset Management Limited.

 

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