Authorities at the Nigerian Stock Exchange, NSE, have revoked the operating license of Midland Capital Markets Limited.
To this end, the firm was deregistered as a capital market operator in Nigeria by the Securities and Exchange Commission, SEC,.
The expulsion of Midland Capital Markets Limited has brought to 90 the total number of stockbrokers so far expelled from the market in 2017.
It was learnt that the withdrawal of the company’s license was approved by the stock market regulator’s highest administrative organ, the National Council of the NSE.
With this development, the stockbroking firm will not be able to trade in the Nigerian stock market and other international markets that Nigeria has Memorandum of Understanding (MoU) with.
Nigerian capital market authorities have standing bilateral agreements with several other jurisdictions including Morocco, Angola, China, Ghana, Kenya, Malaysia, Mauritius, South Africa, Tanzania and Uganda.
With the expulsion, investors who have their investment accounts with the expelled stockbrokers will be required to move their accounts to other functional stockbroking firms.
Also, directors, executives, top management and other employees of Midland Capital Markets Limited will not be able to secure any employment in the capital market without prior clearance and written consent of the Exchange.
Though a regulatory document obtained by The Nation did not give reason for the revocation and expulsion of the stockbroking firm, capital market regulators traditionally apply the highest punishment of expulsion and revocation of licence to serious offences that could undermine investors’ confidence including fraud and inability to meet major operating requirements for the function.
The Exchange stressed the need for dealing firms to always comply with extant rules and regulations.
Under Rule 6.12 of the Rulebook of the Exchange, 2015, members of the Exchange are disallowed from employing any of directors, authorised clerks or other persons including principal officers such as the chief executive officer, chief finance officer, chief compliance officer and chief risk officer, who have been indicted by the Exchange or the Commission without prior regulatory approval.
Also, suspension of any stockbroking firm by SEC will lead to immediate suspension by the NSE while revocation of any broker’s registration will lead to expulsion of the firm by the NSE.
The NSE had recently revoked the operating licence and imposed a fine of N582.37 million on a stockbroking firm-Bytofel Securities and Investment Limited, for allegedly engaging in fraudulent activities in the stock market.
Bytofel Securities was expelled for engaging in “unauthorised sales of clients’ shares and misappropriation of clients’ funds”.
The Nation had earlier reported the expulsion of 67 stockbrokers from the master list of dealers at the stock market. A regulatory report had indicated that the expulsion was the final phase of the delisting of the stockbroking firms, after their dealing licences had been revoked by the exchange.
The group of 67 expelled stockbrokers included ATIF Securities Limited, Abacus Securities Limited, ABC Securities Limited, Akitorch Securities Limited, All Wealth Securities Limited, Apex Securities Limited, Asset Plus Securities Limited, Associated Securities Limited, Avon Finance and Securities Limited, Beachgroove Securities & Investments Limited, Broadedge Securities Limited, Bullion Securities Limited, Cardinal Securities Limited, City Investment Management Limited, Comment Finance & Securities Limited, Corporate Trust Limited, Crown Merchant Securities Limited, Dalgo Investment & Trust Limited, Devcom Securities Limited, Devserv Finance & Securities Limited, EBN Securities Limited, Equity securities Limited, Farida Investment and Finance Limited, Gilts and Hedge Finance Limited, Global Investment & Sec Limited, Goldworth Securities Limited, Haggai Investment & Trust Limited, Halsec Finance Limited, HP Securities Limited, Investicon Nigeria Limited, Investment Resources Limited, Island Securities Limited and Jenkins Investments Limited.
Others included Kapital Securities Limited, Lozinger Securities Limited, M&M Securities Limited, M. J Securities & Investment Limited, Majestic Securities Limited, Matrix Capital Management Limited, MBA Securities Limited, MBCOM Securities Limited, Merchant Securities Limited, Metropolitan Trust Nigeria Limited, MMB Securities & Trust Limited, MMG Securities Limited, Nationwide Securities Limited, New Horizons Finance and Investment Limited, Nigbel Securities Limited, Omega Securities Limited, Omnisource International Limited, OpenGate Finance Company Limited, Pacific Securities Limited, Pamal Finance Limited, Peak Securities Limited, Prime Securities Limited, Prudent Stockbrokers Limited, Royal Securities Limited, Source Finance and Trust Company Limited, Supreme Finance & Investment Co. Limited, Synergy and Assets Trust Limited, Thomas Kinsley Securities Limited, Tradestamp Securities Limited, Trust Securities Limited, Unit Trust Securities Limited, Universal Securities Limited, Viva Securities Limited and Wintrust Limited.
Capital market authorities had earlier in the year expelled 21 stockbroking firms including Allbond Investment Limited, Consolidated Investment Limited, Dakal Services Limited, Emi Capital Resources Limited, First Equity Securities Ltd, Ideal Securities Limited, Maninvest Asset Management Plc, Metropolitan Trust Nigeria Limited, Omas Investment & Trust Company Limited, Pennisula Asset Management & Investment Company Limited, Prudential Securities Limited, Securities Trading & Investments Limited, Transglobe Investment & Finance Company Limited, Tropics Securities Limited, Wizetrade Capital & Asset Management Limited, WT Securities Limited, Zuma Securities Limited, Bosson Capital Assets Limited, KFF Worldwide Solutions Limited, Silver & Gold Securities Limited and First Alstate Securities Limited.
