Business
NSE Proposes New Rules To Protect Investors
The Nigerian Stock
Exchange (NSE) has proposed new rules aimed at protecting investors and attracting more participation in the nation’s capital market.
Titled: ‘Rules and Regulation Covering Dealing Members Amendments and additions,’ the NSE has asked operators to review the rules and make appropriate contributions before they are harmonised and submitted to the securities and Exchange Commission (SEC) for approval.
The new rules regarding investors, if approved, will mandate stock broking firms to adopt a know-your clients (KYC), clients’ management procedures and to render monthly financial statements to clients.
In the area of KYC, the new rule stipulates.” Each dealing member shall obtain the biometrics of all its individual clients and shall continuously update the records of all its clients in that regard.
With regard to corporate entities, the dealing member shall obtain the corporate information of the company in addition to the biometrics of the authorised signatories to its share trading account.
Biometric indentifiers obtained shall include finger prints and its recognition and the information collected shall be applied toward confirming clients’ identities.
For the monthly report, the dealing members would be required to render regularly and promptly, monthly financial statements to each of its clients providing a detailed report of activities on the clients account’ showing all transactions carried out on behalf of such client including all fees and other deductions and shall keep copies of statements provided to customers.
Regarding complaints management, brokers are to establish and maintain appropriate internal complaints management procedure as an initial point of dispute resolution with its clients.
The complaints are in relation to the provision of services in which the client alleges that has suffered or is likely to suffer financial prejudice as a result of the member contravening of failing to comply with an institution given by the client or any agreement or mandate entered into with the client; contravening or failing to comply with the Exchange’s rules and directives; acting dishonestly negligently or recklessly or treating the client unreasonably or unfairly, “the Exchange said.
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