SEC Warns Fund Managers to Desist from Holding Clients Funds 

Kayode Tokede

The Securities and Exchange Commission (SEC) has warned some fund managers still in the habit of holding on to clients’ funds and securities to desist from the act or face severe sanctions from the apex capital market regulator.

The Director General, SEC, Mr. Lamido Yuguda stated this during the third quarter Capital Market Committee (CMC) press briefing held in Lagos.

He noted that such act is a clear violation of the Commission’s Consolidated Rule 95 (1-2) and reminded the Fund Managers that all funds and securities of clients being managed by their firms must be vested with the custodians.

Yuguda also drew the attention of Fund Managers to issues that arose from the Commission’s recently concluded inspection of Fund/Portfolio Management operations that several Fund Managers managing Discretionary and Non-Discretionary Products and Portfolios were yet to seek a ‘No Objection’ of their products and portfolios from the Commission, which is also a violation of the Commission’s Rules.

The SEC DG emphasised the increasing importance of Fintech, Sustainable Finance, Financial Inclusion and Non-Interest Finance.

He reiterated SEC’s commitment to continue creating awareness, imparting knowledge and engendering public participation in these topical areas.

He noted that the Minister of Finance, Budget and National Planning has granted approval  on Non-Interest Finance (taxation) regulation, which has already been gazetted.

·According to him,    “This has important implication for the market towards encouraging new issuances of Non-Interest Capital Market products and services. It is expected that Issuers and Market Operators will take advantage of this by creating more non interest finance products,” he said.

Yuguda expressed appreciation over the recent intervention of the House of Representatives Committee on Capital Markets and Institutions on unclaimed dividends.

·         “The Committee is investigating the rising value of unclaimed dividend and unremitted withholding tax on dividends. The Commission expressed its readiness to provide all the necessary support to the Committee to enable it carry out its assignment.”

He stated that the Commission is rebuilding the E-Dividend Management Mandate System (e-DMMS) platform which according to him involves having a centralized submission of E-dividend mandate forms, Application Programming Interface (API) for Banks and Registrars, and a revamped web interface among others.

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