Three reasons the NSE expelled 38 stockbroking firms in six months

Thirty-eight stockbroking firms have been expelled from the Nigerian Stock Exchange (NSE) in the last six months. This takes the total number of firms expelled in the past two years to 120, a new report has shown.

The expulsion of the 38 firms was ordered by the National Council of the Exchange after investigations into their affairs by the management and council of the Exchange. This resulted in the withdrawal of the dealing firms’ license.

Reasons for the expulsion: The probe was prompted by the poor structure of the stockbroking firms which was labeled as the weak points of the market. This led to the investigation that uncovered the following;

  • Acute level of inactivity.
  • Irredeemably weak operating status.
  • Infractions against the extant rules at the Exchange.

The expelled firms are:

  • Mercov Securities Limited
  • Resano Securities Limited
  • Transafrica Financial Services Limited
  • Andruche Investments Plc
  • Angela Eccles Limited
  • Associated Trust Investment & Finance Limited
  • Beaver Securities Limited
  • Betraco Securities Limited
  • Cobal Ventures Limited
  • Corporate Focus Securities Limited
  • Financial Intermediaries Limited
  • GF Securities Limited
  • IB Finance Limited
  • Integrated Securities Ltd
  • Integrated Ventures Nigeria Limited
  • Intercommerce and Consultant Limited
  • Investment & Capital Development Company Limited,
  • Investment Trust Company Limited.
  • Kamrash Securities Limited
  • Lakeside Asset Management Limited
  • M & F Investment & Securities LimitedMilestone Investment Services Limited
  • Millennium Investment Trust Limited
  • Moji Securities & Investment Nigeria Limited
  • Morgan Trust Asset Management Plc
  • Multibank International Securities Limited
  • Nationwide Finance and International Securities Limited
  • Novelty Investment Limited, and ten others.
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What does this mean for firms? The expulsion will cost the firms their licenses to trade in international markets that have bilateral agreements with the NSE. These countries include the likes of Morocco, Angola, China, Ghana, Kenya, Malaysia, Mauritius, South Africa, Tanzania, and Uganda.

NSE hammer on firms’ management: While the firms will be unable to trade on the stock exchange in the meantime, their directors, executives, top management and other employees will be required to apply for clearance and receive consent from the Exchange before securing any employment in the capital market.

What happens to investors’? Investors with the expelled firms have been advised to transfer their investment accounts to other functional stockbroking firms.

Source: Nairametrics

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Author: see naija

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