Regulatory Alerts2019-10-28
Operations of Nominee Accounts by Capital Market Operators
The Securities and Exchange Commission requires Capital Market Operators to secure a one-off approval before maintaining nominee accounts for clients. Approved operators must file quarterly returns within thirty days of each quarter’s end, incurring a N100,000 initial penalty and N2,000 daily surcharge for late submissions. Existing operators must disclose their account lists, beneficiary numbers, and estimated asset values by October 31, 2019, to obtain a no-objection status.
Following the amendment of Rule 61 (2) of the Consolidated SEC Rules and Regulations 2013 on the Regulation of Nominee Accounts, the Commission hereby issues the under listed directives to facilitate effective compliance with the Rules. a) A Capital Market Operator (CMO) who wishes to operate nominee accounts shall apply to the Commission and obtain a one-off approval to maintain nominee accounts on behalf of its client(s). This approval would enable CMO’s operate subsequent nominee accounts on behalf of prospective clients. b) Once the one-off approval is granted, Capital Market Operators are required to commence filing of quarterly returns, effective from quarter ended 31st December, 2019. All filings must reach the Commission not later than 30 days from the end of the quarter. Failure to file returns would attract a penalty of N100,000 at the first instance and a further sum of N2,000 per day for everyday the violation continues. c) Capital Market Operators currently operating nominee accounts without the approval of the Commission are required to disclose same not later than 31st October, 2019 and obtain a no objection from the Commission. The disclosure should include a list of the nominee accounts, number of beneficiary(ies) in each of the nominee account and estimated value of clients’ assets. The returns should be filed in the format below to inspectorate@sec.gov.ng