Circular to All Capital Market Operators on Mandatory Registration with Relevant Trade Groups/Associations



Following resolutions at the just concluded Capital Market Committee (CMC) meeting, the Securities and Exchange Commission (SEC) hereby directs all market operators who are yet to register as members of their respective trade groups or associations to do so on or before 31st October, 2016 unfailingly.


As part of efforts to restore investor confidence in the Nigerian capital market, the SEC had developed rules on complaints management in February 2015. The rules outline a new and more responsive complaint management framework that requires the SEC, Self-Regulatory Organizations (SROs) and capital market Trade Groups/Associations to establish fair, impartial and objective complaints management policies for the handling of investor complaints. This new framework is expected to significantly improve dispute resolution within the market and ultimately reduce infraction rates as it streamlines the complaints management process.

Historically, the SEC had been receiving the overwhelming majority of complaints from investors even when such complaints could be addressed more swiftly at trade group level. In attending to such huge volumes of complaints, the SEC has had to allocate significant resources that could be better utilized in more effective market development and regulation. This informed the need to overhaul the complaints management mechanism in the Nigerian capital market as encapsulated in the SEC Rules and Regulations which are available on the website.

Need for Stronger SROs and Trade Groups

In order to effectively delegate key complaints management functions to market operators, the SEC recognizes the need to strengthen SROs and Industry Trade Groups/Associations. This is to enable them play more prominent roles in the management and resolution of investor complaints. Empowering SROs and Trade Groups to handle and resolve investor complaints is in line with best practice from both emerging and developed markets.

Since the new complaints management framework was released by the SEC in February 2015, its implementation has been rather slow due to the inability of a few trade groups to develop their respective complaints management policies. A review of the framework’s implementation at the last CMC meeting held on Tuesday 9th August, 2016 revealed that a key constraint facing the trade groups is the non-compliance of some market operators who are yet to be registered with their relevant trade association.


In accordance with the SEC’s commitment to fully implement the new complaints management framework, this circular hereby directs all capital market operators who are yet to be registered with their respective Trade Group/Association to do so on or before 31st October, 2016. The Commission will not hesitate to take appropriate actions against any failure to comply with this directive.