The Nigerian Exchange (NGX) has moved to strengthen market discipline and protect investors by enforcing stricter sanctions against brokers who transfer clients’ funds or securities to third parties.
In a circular to Trading License Holders and the investing public, the Exchange reaffirmed that under no circumstance should any broker deliver the proceeds from the sale of a client’s securities or transfer any portion of the client’s available balance to a third party.
According to the NGX, this directive aligns with Rule 11:14 – Third-Party Transactions (Sales Proceeds and Transfer of Client Balance in the Name of Third Party) in the Rulebook of The Exchange, 2015 (Dealing Members’ Rules), as amended.
The rule provides that any Trading License Holder found in breach will face a minimum fine of ₦250,000 and/or suspension from trading for a period determined by the Exchange.
“Trading License Holders are hereby reminded of their obligation to ensure strict compliance,” the notice stated, warning that non-adherence to these provisions would attract appropriate regulatory sanctions.
The NGX said the renewed enforcement is part of its ongoing effort to uphold market integrity, protect investors’ assets, and strengthen confidence in the capital market.
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