The Securities and Exchange Commission (SEC) is to amend rules guiding managed funds and make them more stringent as part of efforts to protect investors in the nation’s capital market.
THISDAY checks revealed that the amendment and introduction of new rules resulted from outcome of BGL Plc saga that led to the banning of its group managing director, Mr. Albert Okumagba from capital market activities for 20 years.
Okumagba and his deputy, Chibundu Edozie were banned by SEC following the decisions of the commission’s Administration Proceeding Committee (APC) that investigated complaints of investors against Okumagba and his company over failure, refusal and or/neglect to liquidate their investments in both the Guaranteed Consolidated dated Notes and Guaranteed Premium Notes , two investment products run by the company.
It was gathered that during the APC’s hearing of the matter, it was realised that the rules guiding fund management in the market needed to be reviewed and strengthened so as to protect investors.
“New rules mandating registration of privately managed funds apart from the conventional collective investment schemes would be introduced to the market. From every indication, the commission is already talking with the Funds Managers Association of Nigeria (FMAN) in that regard,” a market source told THISDAY on Monday.
BGL Group and its sponsored individuals were suspended from capital market operations in May 2015 following investors’ complaints valued over N12.9 billion.
According to SEC, the investors had alleged several violations of the Investments and Securities Act 2007, SEC Rules and Regulations as well as the Code of Conduct for Capital Market Operators including, amongst others: Performance of a capital market function without due registration, promoting and marketing products not registered by the Commission, failure/refusal to resolve clients’ complaints, failure to file statutory returns and furnishing the Commission with false and misleading information.
The Commission explained that in a bid to obtain justice for the complainants and grant all parties fair hearing, the matter was presented before the APC which sat on February 6, 2016. During the proceedings testimonies and documentary evidence were tendered by various parties.
SEC said upon conclusion of the proceedings, its APC arrived at a decision, which has been approved by the relevant authority.
Specifically, the APC decided that by their actions and/or omissions BGL Securities Limited, BGL Asset Management Limited, Okumagba, Edozie, 5th, 6th, 7th, 8th, 9th, 10th, 11th, 12th, 13th, 14th, 15th, 16th, 17th, 18th, 19th, 21st and 22nd respondents engaged in acts capable of adversely affecting the investing public’s image of, and confidence in the capital market. Consequently, the APC decided that the registration of BGL Securities Limited and BGL Assets Management Limited be cancelled, while Okumagba and Edozie, have been banned from capital market activities for 20 years.