The Securities and Exchange Commission (SEC) has proposed the 2024 Investments and Securities Bill (ISB), which includes a penalty of at least N20 million, a 10-year prison sentence, or both for operators of Ponzi schemes.
SEC’s director-general, Emomotimi Agama, stated this on Thursday during a public hearing on the bill in Abuja.
According to Agama, the bill aims to impose severe jail terms and other tough penalties on those promoting Ponzi schemes. It includes an explicit ban on Ponzi and pyramid schemes, as well as other illegal investment operations, to protect Nigerians from losing funds to fraudulent managers.
Agama further noted that the commission identified areas needing improvement in the ISB 2007, aiming to strengthen existing rules, clarify ambiguities, and add new provisions to boost the global competitiveness of Nigeria’s capital market.
“A vital provision in the bill is the new stipulation that the Investor Protection Fund (IPF) set up by the securities exchanges would compensate investors who suffer pecuniary losses arising from the revocation or cancellation of the registration of a dealing member firm,” he said.
“In the extant law, compensation from the IPF is limited to instances of ‘bankruptcy’, ‘insolvency’ or other acts of ‘negligence’ by a dealing member firm.
“This bill also contains an entirely new part which provides for the regulation of Commodity Exchanges and Warehouse Receipts.
“These provisions are essential for the development of the entire Commodities ecosystem.
“There is no doubt that Nigeria needs and deserves a world-class capital market to facilitate on-going economic diversification.
“The passage and enactment of the Investments and Securities Bill will be a pivotal step in this direction.”
In his remarks, Senate President Godswill Akpabio said the ISB 2024 was a beacon of hope for the nation’s economic landscape.
Akpabio, represented by Senator Binos Yaroe, said the country is taking a bold step toward modernising its financial market and fostering transparency by repealing the ISB Act 2007.
He said the bill is designed to create a robust and equitable environment for investments to thrive in an increasingly competitive global economy.
