In its commitment to combat unregistered operators and stem the tide of Ponzi scheme activities in Nigeria, the Securities and Exchange Commission is set to introduce an Unstructured Supplementary Service Data (USSD) code for verification of capital market operators.
Director General of the SEC, Dr. Emomotimi Agama who stated this in an interview in Abuja weekend, said the code would be unveiled at the next Capital Market Committee Meeting scheduled for this quarter.
According to Dr. Agama, “We are introducing a code system that will allow mobile phone users to verify a capital market operator using USSD codes. They do not require internet connection to be able to do this, which means any Nigerians that has a mobile phone will be able to perform this function. If anyone comes to you claiming what they are not, all you need to do is check with the code to know the status of their registration. That will be launched at the next Capital Market Committee Meeting”.
Agama disclosed that the Commission is putting all hands on deck to deal with the malaise of unregistered and prohibited operators and schemes because it has a national responsibility to educate people, to develop the market and to get people to understand that wealth can be made legitimately via legitimate means.
The SEC DG emphasized that registration with the Corporate Affairs Commission does not qualify an entity to be an investment company or carry out investment activities, adding that such an entity can only be qualified to be an investment company if they explicitly receive the registration of the SEC.
“The first thing you ask anyone that comes to speak to you on money matters, ask them the relevant questions on registration with the SEC. We have stockbrokers, registered accountants, registered solicitors etc all of whom are registered by the SEC to provide that advice that you need. We have agents who we call sponsored individuals that can provide this information to those that are interested. Investment inclusion is the end game.
Agama disclosed that the recently signed ISA 2025 was particular about Ponzi schemes as it was termed prohibited schemes, which means it goes beyond the normal Ponzi schemes to all other such crimes that people commit.
The SEC boss therefore reiterated the Commission’s earlier warnings to the public to desist from engaging in Ponzi or unregistered investment schemes that promise guaranteed or exaggerated returns. These schemes are not registered with the SEC and do not offer investor protection under the law.
He encouraged investors to conduct due diligence and verify the registration status of any investment firm or product by visiting the SEC website or contacting the Commission directly through official channels adding that the Commission remains committed to its mandate of protecting investors, ensuring fair practices, and maintaining confidence in Nigeria’s capital market.