Lamido Yuguda, DG SEC
The Securities and Exchange Commission has warned Nigerians against investing in Ponzi schemes, adding that any investment schemes that promise unrealistic returns should be treated with caution.
The Director-General of SEC, Lamido Yuguda, gave the warning while addressing Journalists shortly after the Second Capital Market Committee meeting.
Ponzi scheme is a fraudulent investment operation where the operator, an individual or organisation, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.
Speaking on the development, Yuguda called on Nigerians to always check the website of the Commission for list of approved capital market operators before making such investment decisions.
He cautioned the investing public against making hasty investment decisions when the returns on such investment are too attractive.
The SEC DG assured that the commission will continue to work with relevant agencies of government and other critical stakeholders in the capital market to tackle the issue of ponzi schemes.
He urged every capital market operator to conduct their businesses within the market functions approved for it by the Commission.
The SEC Boss said the Commission will not hesitate to deal decisively with any operator who carries out any activity outside the function approved for it by the Commission.
He said, “The Commission continues its campaign against illegal operators in the capital market, especially Ponzi Schemes and has adopted multi-level engagements with media platforms and regulators of publicity agencies in order to curb the reach and activities of these illegal operators.
“While we continue our activities to resolve the complaints that have been forwarded to the Commission through the official channels, it is important to reiterate to the investing public to bewary of unscrupulous schemes that promise unrealistic returns on investment.
“We will like to use this opportunity to reiterate our commitment towards zero tolerance for market infractions. We urge every capital market operator to operate within the market functions approved for it by the Commission.
“The Commission will not hesitate to deal decisively with any operator who carries out any activities outside the function(s) approved for it by the Commission.
“No capital market can grow without discipline and adherence to laid down Rules and Regulations”.
On the performance of the capital market, he said the Committee observed that market performance has been mixed, driven largely by domestic and global economic factors, the impact and responses to the pandemic and the regulatory environment.
In line with its mandate, he said the Commission has been working on some initiatives that would put the market on the path to recovery.
He explained that the Commission has registered two Fintech Capital Market Operators, which include a Digital Fund Portfolio Manager and a Digital Sub-broker, noting that more would be registered in due course.
Yuguda stated that the Commission has also approved some derivative contracts, developed the regulatory framework for derivatives trading as well as rules on Interoperability of Central Securities Depositories in Nigeria.
As part of measures to deepen the commodities ecosystem, he stated that the Commission held engagements with the National Insurance Commission (NAICOM) towards de-risking and insuring certain commodity assets, which we believe will attract more investments within the space, particularly from the Pensions industry.
A technical committee was also constituted comprising representatives of the Commission, Standards Organization of Nigeria (SON), AFEX, Lagos Commodities and Futures Exchange (LCFE) & Nigerian Commodities Exchange (NCX) to deliver agro-based standards within 3 months.
To develop an effective price discovery mechanism for the commodities ecosystem, he said a technical committee has been constituted for this purpose with the mandate of developing modalities for this exercise.
On the due date for renewal of registration, he said the registration portal has been reopened until August 31, 2021.
This, according to him, is to enable operators that are yet to update their information with the Commission do so before the end of the new deadline.
