STAKEHOLDERS BACK NSE OVER REVOCATION OF BROKERS' LICENCES
BY NKIRUKA NNOROM
Stakeholders in the nation's capital market have expressed support for the Nigerian Stock Exchange (NSE) over the recent withdrawal of operating licences of some dealing member firms, saying the action will position the NSE for optimal performance.
The NSE had recently withdrawn the licences of 10 dealing member firms; 48 others were declared inactive, while 27 others were said to have unactivated licences.
Among the firms whose licences were revoked were: Apex Securities Limited, Asset Plus Securities Limited, Beachgroove Securities Limited, Broadedge Securities Limited and IMB Morgan Plc (Morgan Trust Limited).
Others include: Jenkins Investment Limited, Prudent Stock Brokers, Source Finance and Trust, Thomas Kinsley Securities Limited and Viva Securities Limited.
Mr. Simon Osagwe, an analyst, explained that such action was needed to strengthen the activities of the Exchange, arguing that most of the stockbroking houses operate on negative capital base.
According to him, 'there are lots of in-house problems that need to be addressed urgently before they get out of hand. The revocation of licences may be positive and will even give the stock market a sigh of relief because there is no reason why the Nigerian Stock Exchange will continue to condone the activities of some dirty dealing firms.
'Nobody should read any other meaning to that. This is because the stock market has a way of sanitizing itself, ensuring that the rules and regulations are obeyed and also enforced by the regulators at all times. With that, the integrity of the market will be retained.'
Also lending his voice, the Chief Executive Officer, Lambeth Securities Limited, Mr. David Adonri, said he was optimistic that the market would not be affected by the action, noting that it will rather reposition and strengthen the market.
He explained that the capital market regulators had the responsibility to ensure investors' protection and orderliness in the market as well as applying adequate penalties for any offense committed.
'Very grievous offences by market operators are visited with very severe sanctions including withdrawal of operating licences and jail terms. Cleansing of the market is a continuous exercise which the regulators regularly undertake to boost investors' confidence,' he said.
Market Analyst, Tunde Oyediran of Deloy Consulting noted that the 10 stock broking firms whose licences were revoked had long been out of business, saying that the continuous exercise which the regulators regularly undertake to boost investors' confidence,' he said.
Market Analyst, Tunde Oyediran of Deloy Consulting noted that the 10 stock broking firms whose licences were revoked had long been out of business, saying that the action of the Exchange was to officially revoke their licences.
His word: 'The 10 stock broking firms have ceased operations for a very long time. NSE has just formally revoked their licences. This action does not in any way affect the actives in the market; it rather builds the confidence of investors, knowing that regulators are always there to protect their investment.'
Mr. Gbadebo Olatokunbo, an investors, stated that such actions are needed to reassure investors of the integrity of the market, urging the NSE to also explore the court actions to rid the market of gamblers and rogue dealers.
Meanwhile, President, Association of Stockbroking Houses of Nigeria (ASHON), Mr. Emeka Mmadubuike, had dismissed the development, saying it was misinformation on the part of the Nigerian stock Exchange (NSE).
He argued that the revocation which the NSE treated like fresh development occurred about two years back, adding that it was misleading for the NSE to bring up an issue that was long forgotten in the manner it did.