12 Stockbroking Firms Blacklisted For Violating The Regulations Of The Stock Market
Nigerian stock exchange has blacklisted 12 stockbroking firms for violating the regulations of the stock market.
The affected stockbroking firms are Supra Commercial Trust Company Limited, Itis Securities Limited, ML Securities Limited, Ceb Securities Limited and Horizon Stockbrokers Limited.
Others are Adamawa Securities Limited, Gombe Securities Limited, First Stockbrokers Limited, GMT Securities Limited, Standard Alliance Capital & Asset Management Limited, and Enterprise Stockbrokers Limited,
The exchange suspended them from the market for failing to building up their shareholding fund up to the minimum requirement.
Reacting also, David Adonri, Vice Executive Chairman, HIGHCAP Securities Limited, said: “Meeting the statutory minimum capital requirement is primary prerequisite for operating in the capital market.
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“However, the shareholders fund of many firms declined in recent past due to the hostile economic environment. The erosion of investor’s disposable income due to galloping inflation adversely affected the income of firms.
“Although, adequate capital is essential for stockbroking business, its importance to investor protection and safety of investment is minimal.
“This is because Stockbrokers are agents to their clients who are the principals. They buy securities in name of clients and deliver to them.
“This is unlike the relationship between a depositor and his banker which is creditor / debtor relationship that requires commensurate capital to secure the deposit liabilities.
“Other risk mitigants in the Capital Market like Fidelity Guarantee Insurance and investors’ protection fund can address safety of investments better.
“Therefore, investors have nothing to worry about even if firms are temporarily undercapitalized. Their investments are safe in the Capital Market due to the ring fencing of their portfolios.”
