The Association of Securities Dealing Houses of Nigeria (ASHON) has said it is working closely with the Securities and Exchange Commission (SEC), the Nigerian Stock Exchange (NSE) and other key stakeholders to address the issue of irregular accounts of investors.
The move, according to ASHON is part of its efforts to ensure transparent transaction on the exchange, enhance investor protection mechanism and uphold market integrity.
Irregular accounts are those that fall below minimum standard of disclosure for Know Your Client (KYC) and capable of distorting transparent transaction processes.
Chairman of ASHON, Chief Onyenwechukwu Ezeagu, explained that the association had begun collaboration with all stakeholders, including the Central Securities Clearing System Plc (CSCS), registrars and shareholders to ensure that the irregular accounts are updated within the time frame set by SEC.
Ezeagu urged the shareholders to liaise with their stockbrokers to provide necessary information that will enhance the conduct of their identity test. He stated that the outstanding accounts would have been resolved but for COVID-19 pandemic and its associated challenges.
He said: “The accounts which our members are currently trading on are KYC- compliant. The issue is the old accounts. They must be updated. This is part of our due diligence as a global market.
“We would have resolved this but for COVID-19 pandemic that has obstructed many activities globally. The situation in the market is also a factor. The case was made worse by the lockdown, social distancing, and restriction of movement.
“The good thing is that we are collaborating with all stakeholders. We urge all shareholders to update their records with stockbrokers without further delay. After this exercise, account of a shareholder that is not updated shall not be traded on.”
Only recently, ASHON announced its efforts towards expanding income streams of its members by initiating moves to enable them trade on other securities markets such as FMDQ, NASD OTC Plc, AFEX Commodities Exchange and Lagos Commodities and Futures Exchange (LCFE).
“In our resolve to create new streams of income for our members, we intensified efforts through the FMDQ Committee to establish a trading relationship with the FMDQ. The committee has submitted its final report and we are at the last stage of onboarding our members to trade on the FMDQ platform,” Ezeagu had said.
The move was expected to reverse the current situation whereby stockbrokers are not so active in trading fixed income securities on the FMDQ , whereas the financial instrument was the hub of transaction on the NSE in the past.