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FG Declares Foreign Stock Trading Platforms Like Bamboo, Trove, Rise and Others Illegal

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The Federal Government through the Securities and Exchange Commission (SEC) has declared the activities of stock trading and investment platforms including Bamboo, Trove, RiseVest, and others as Illegal.

The Commission in a statement titled ‘Proliferation of Unregistered Online Investment and Trading Platforms Facilitating Access to Trading in Securities Listed in Foreign Markets’ stated: “That only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public.”

The statement reads: “The attention of the Securities and Exchange Commission (the Commission) has been drawn to the existence of several providers of online investment and trading platforms that purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on Securities Exchanges registered in other jurisdictions. These platforms also claim to be operating in partnership with Capital Market Operators (CMOs) registered with the Commission.

“The Commission categorically states that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public.

“Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.

“The Commission enjoins the investing public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.”

Recently, startups like Bamboo, Trove, RiseVest, WealthNG & Chaka have offered Nigerians the opportunity to invest in foreign companies like Apple, Microsoft, Google, and Facebook among others.

For Chaka, it was rather ruffled earlier than the others. It was one of the first stock trading platforms the SEC first clamped as the regulator on Thursday 17th December 2020 secured interim Order from The Investments and Securities Tribunal, (IST) retraining the fintech company and its promoters from advertising or offering for sale shares, stock, or other securities of companies or other entities. Now the dragnet has been extended to cover all investment startups in Nigeria.

These trading and investment apps allowed Nigerians to own stakes in these foreign companies and it also served as a means to diversify investment after the Central Bank of Nigeria ordered banks and other financial institutions from providing support for cryptocurrencies.

Commenting, the CEO of Bamboo, Richmond Bassey said in a release that the startup is aware of the SEC circular as he assured its customers that their assets are safe and accessible.

He said: “We are aware of the recently released SEC circular about trading in foreign markets. First off, we want to assure you that your assets on Bamboo remain safe and easily accessible to you. We are already in discussions with the SEC and our broker partner and are fully committed to working with them to ensure your interests as our users are fully protected.

“We want to reassure you that there’s nothing to be concerned about. We are still able to carry out all our operations and will continue to do so. Should the situation change, we will inform and advise you on the best course of action. Thank you for your continued faith and trust in us. We will continue to put in all the hard work to serve you.”

Tweeting its response, Risevest said it was in full compliance with all regulatory requirements and it assured users of their investments.

For Trove, the startup said they have been in talks with the SEC ‘to get more clarity on the circular’ adding that they are already “engaging with top-level executives at our local partner brokers.”

It further stated that customers can continue trading on the platform while informing them that their “US funds and equities are held in custody by Drivewealth LLC, a regulated broker dealer in the US and protected by the SIPC, for up to $500,000.”

On its part, Chaka explained that: “From inception, we made it imperative that all equities available through Chaka’s app are offered through regulated parties like Citi Investment Capital Limited (CICL) and others who are licensed by the Nigerian SEC and other financial regulators.”

It emphasised that it “Has taken the necessary steps to register with the Securities & Exchange Commission of Nigeria (SEC) for a newly created license”.

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