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Investments And Securities Act, 2007

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INVESTMENTS AND SECURITIES ACT, 2007
ARRANGEMENT OF' SECTIONS
Section
PART I-EsTABLISHMENT AND MANAGEMENT OF THE SECURl,TlES
AND EXCHANGE COMMISSION
1. Establishment of the securities and exchange Commission.
2. Head office of the Commission.
3. Composition of the board of the Commission.,
4. Duties of the board.
5. Appointment and tet;1Ure of office of members of the board.
6. Director-General and full time Commissioners to. be .fully devoted to the service of
the Commission.
7. Management of the Commission.
8. Disqualification and crssatipn ~h)'poinlment ,
9. Remuneration and allowances of members of the Board., 10. Meetings of the board of the Commission.
11. Disclosure of interest.
12. Code of ethics for members of the board.
PART II-FUNCTIONS AND POWERS OF THE COMMISSION
13. Functions and powers of the Commission.
14. Powers to establish departments.
PART Ill-STAFF OF THE COMMISSION
15. Appointment of the Secretary and other staff of the Commission.
16. Remuneration of the Secretary and other staff of the Commission., . .. ,. - , 17. Duties of the Secretary.
18. Service in.the Commissionto be pensionable.
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PART [V-FINANCIAL PROVISIONS
19. Funds of the Commission.
20.
21.
Application of the funds of the Commission.
Reserve account.
22. Power to accept gifts.
Penalties, fees, etc. to be retained and utilized by the Commission.
Borrowing by the Commission.
Investment by the Commission.
Annual estimates, account and audit.
24.
25.
26.
27. Annual report.
PART V-REGISTRATION AND REGULATION OF SECURITIES EXCHANGES, CAPITAL TRADE POINTS
AND OTHER SELF REGULATORY ORGANIZATIONS
28. Registration of securities exchanges and capital trade points.
29. Conditions for registration. No 1 of 1990.
30. Revocation of certificate of a securities exchange or capital trade point.
3 I. Approval of amendments to listing rules
32. Role of securities exchange, capital trade point and other self regulatory
organisations.
33. Securities exchange, capital trade point or self regulatory organisation to give notice
of disciplinary actions, etc.
34. Review of disciplinary actions taken by a securities exchange, capital trade point or
self regulatory organisation.
35. Power to issue directives to a securities exchange, capital trade point or self
regulatory organisation, etc.
36. Power of the Commission to prohibit trading in particular securities.
37. Securities exchange, etc. to maintain proper books of account.
PART VI-REGISTRATION AND REGULATION OF CAPITAL MARKET OPERATORS
38. Registration of capital market operators.
39. Accounts to be kept by capital market operator.
40. Maintenance of separate accounts and payment into certain trust accounts.
41. Penalty for withdrawing money from trust account without authority.
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42. Money in trust account not available for payment or debt. 43. Claims and lien not affected.
44. Right to copies of book entries of transactions and to inspect contract notes.
PART VII-INSPECTIONS AND INVESTIGATIONS
45. Designation of officers of the Commission for supervisionof certain capital market
operators.
46. Routine examination and report.
47. Special examination.
48. Failing capital market operator.
49. Control offailing capital market operator.
50. Management of failing capital market operator.
51. Power of the Commission to revoke registration or apply to Court.
52. Duty to notify capital market operator or person to be affected.
53. Application to the Federal High Court for winding up.
PART VIII-REGULATION OF SECURITIES
A-REGISTRATION 'OF SECURITIES
54. Compulsory registration of securities and investments of public companies and
collective investment schemes.
55. Electronic and other means of issuing and rransferringsecurities.
56. Register of securities.
57. Particulars of register.
58. Production of register.
59. Extracts of register.
B-CORPORATE RESPONSIBILITY OF PuBLIC COMPANIES
60. Filing of annual and periodic reports with the Commission.
61. System of internal control of public companies.
62. Auditors of public companies to register with the Commission.
63. Duty of auditor to report on internal controls of public companies
64. Disclosure of quarterly earning forecasts by listed public companies.
65. Penalties for contravention of sec IiOIlS 60, 61, 62.63l1lldI64.
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C-IN GENERAL
()6. Contravention of part VIII by bodies corporate.
P/\RT IX-PUBLIC OFFER AND SALE OF SECURITIES AND INVITATIONS TO HIE PUBLIC
67. Control of invitations to the public.
68. Invitation to the public to deposit money by public companies.
69. Meaning of "invitation to the public"
70. Offers for sale deemed to be made by the company.
71 . Form of appl ication for shares to be issued with prospectus.
72. liffcctive date of a prospectus.
73. Contents of a prospectus.
74. Exemption from application of provisions relating to prospectus in certain cases.
75. Prohibition of issuance, circulation, etc of certain notices, circulars and
advertisements.
76. Exemption certificate and effect.
77. Expert's statement on prospectus.
7X. Prospectus on invitation to the public to acquire or dispose of securities.
79. General and restricted invitations to the public.
80. Registration of prospectus.
81. Contract in prospectus, etc., not to be varied without leave.
82. Document with offer of securities for sale to be deemed a prospectus.
83. Interpretation as to prospectus statements.
84. Form of statement in lieu of prospectus.
85. Civil liability for mis-statements in prospectus.
86. Criminal liability for mis-statement in prospectus.
87. Criminal liability in respect of statements in lieu of prospectus.
88. Allotment of securities.
89. Opening of subscription lists.
90. No allotment unless minimum subscription received.
91. Application monies to be held in trust until allotment.
92. Prohibition of allotment in certain cases.
93. Effect of irregular allotment.
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94. Action for rescission.
95. Allotment of securities and dealing on securities exchange, etc.
96. Return of surplus monies to subscribers, etc.
PART X-,-CONDUCT OF SECURJTl!:S BUSINESS
97. Prohibition of certain cash transactions.
98. Securities dealer to issue Contract notes.
99. Contents of contract notes.
100. Disclosure of certain interests in securities by securities dealers, etc.
101. Dealing as principal.
102. Dealings by employees of securities dealers.
103. Securities dealers to give priority to client's orders.
104. Securities lending and margin requirements:
PART X I-TRADING IN SECURITI~S
105. False trading and market rigging transactions.
106. Securities market manipulation.
107. False or misleading statements. , . .,j
108. Fraudulently inducing persons to deal in securities.
109. Dissemination of illegal information.
110. Prohibition of fraudulent means.
III. Prohibition of dealing in securities by insiders;
112. Abuse of information obtained in official capacity.
113. Actions not prohibited by sections III and 112 as dealings iii securities by insiders.
114. Effect of contravention.
115. Criminal liability under this part.
116. Compensation to be determined by the Commission or Tribunal.
PART XIl-M~R6eRS, T""E-oVERS ANDAeQUISITIONS
I17. Meaning of certain words used in this part. " 118. Extent of application of this part.
119. Meaning of merger.
120, Thresholds and categories of mergers"
121. Consideration of mergers,
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122. Small merger notification and implementation.
123. Notification and implementation of intermediate and large mergers.
124. Merger investigations.
125. Intermediate merger procedure before the Commission.
126. Large merger procedure before the Commission.
127. Revocation of merger approval.
128. Power to order the break-up of company.
129. Power to acquire shares of dissenting shareholder.
130. Right of a dissenting shareholder to compel acquisition of his shares.
13I. Take over.
132. Take-over bid.
133. Person making a take-over bid.
134. Authority to proceed with take-over bid.
135. Registration of copy of proposed bid.
136. Requirements as to bid under take-over bid.
137. Corporation making take-over bid.
138. Despatch of bid to shareholders, etc.
139. Arrangement for funds.
140. Directors' circular.
141. Inclusion of expert's opinion in a bid.
142. Bid for all shares.
143. Bid for less than all shares.
144. Provisions applicable to every bid.
145. Duty of the Commission in relation to certain instruments.
146. Acquisition of shares of dissenting shareholders.
147. Procedure where dissenting offeree makes election.
148. Duties of offeree company.
149. General provisions as to payment.
150. Rights ofremaining shareholders.
151. Offences in relation to take-over bids.
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PART XIlI---'COLLECTIVE INVESTMENT SCHEMES
A-General
152. Definition of certain words used in this Part.
153. Meaning of collective investment scheme, etc.
154. Types of collective investment scheme. Cap 59.
155. Principles for the administration of the scheme.
156. Disclosure of Information.
157. Duties of manager of a scheme.
158. Requirements for administration of collective investment schemes.
159. Prohibition of misleading names and acts.
160. Authorisation of collective investment scheme.
161. Registration of units or securities of a scheme.
162. Alteration of trust deed, custodial agreement or change of name of scheme to be
approved by the Commission.
163.
164.
165.
166.
167.
168.
169.
170.
171.
172.
173.
174.
175.
Revocation of authorisation of scheme.
Approval of prospectus and other offer documents on scheme.
Civil liabilities arising from prospectus.
Redemption of units or securities.
Prohibition of certain transactions and profits by manager under a scheme.c Liability of trustees and custodian under a scheme.
Audit of accounts of a scheme and annual general meetings.
Determination of market price of units _orsecurities.
Investment of a collective investment scheme.
Inspection and investigation.
Powers of the Commission after an investigation.
Cancellation or suspension of registration, of a manager.
Commission may object to publication or distribution of misleading, objectionable,
etc. documents.
176. Power of Commission to request audit.
177. Declaration of certain practices as irregular or undesirable.'
178. Appointment and termination of appointment of trustee or custodian.
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179. Qualification and registration of trustee or custodian.
180. Suspension or revocation of the registration of trustee or custodian.
181. Duties of trustee or custodian.
182. Status of assets.
183. Liability of trustee or custodian in respect of loss of assets.
184. Appointment and removal of auditor.
185. Duty of auditor to disclose irregularity or undesirable practice.
186. Power to make regulations on the constitution and management of coliective
investment schemes.
187. Alteration of schemes and change of manager, trustee or custodian.
188. Restriction on activities of managers.
189. Publication of scheme particulars.
190. Power of intervention.
191. Representation against directive or its revocation.
192. Open-ended investment company.
193. Real estate investment companies or trusts.
194. Registration of real estate investment company.
]95. Foreign collective investment schemes.
196. Supplemental investigations.
PART XIV-INVESTORS PROTECTION FUND
197. Establishment of an investors protection fund.
198. Objectives of an investor protection fund.
199. Composition and tenure of the board of trustees.
2UO. Removal from the board of trustees.
20 I. Powers of the board of trustees.
202. Monies constituting the investor protection fund.
203. Fund to be kept in separate bank account.
204. Payments out of the investor protection fund.
205. Accounts of an investor protection fund.
206. Power of the board of trustees to delegate functions to its management subcommittee.
207. Minimum amount in the investor protection fund.
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208. Protection of the investor protection fund in the event of any reduction.
209. Levy to meet liabilities.
210. Power of a securities exchange or capital trade point to make advance to an investor
protection fund.
211. Investment of the funds of an investor protection fund.
212. Application of the investor protection fund.
213. Claims against an investor protection fund.
214. Notice calling for claims against the investor protection fund.
215. Power to settle claims.
216. Form of order of the Tribunal.
217. Pewer to require production of evidence.
218. Subrogation.
219. Application of insurance money.
220. Penalty for contravention.
22 L Interpretation.
PART XV-BORROWING BY FEDERAL. STATE,
AND LOCAL GOVERNMENTS AND THEIR AGENCIES
222. Bodies to which this Part applies.
223. Issue of registered bonds or promissory notes.
224. Restriction on raising offunds from the capital market.
225. Loans to be charged upon revenue.
226. Bodies to publish details of loans in the gazette or other official document.
227. Register of securities and appointment of registrar
228. Appointment of issuing house.
229. Liability ofa body in respect of issue of registered securities.
230. Bond holders to be registered.
231. Condition for registration of bond holders.
232. Bond certificate.
233. Transfer of registered bond.
234. Registration of transfer of bonds.
235. Registration ofliens on bonds.
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236. Closing of register.
237. Register to be conclusive.
238. Promissory notes.
239. Manner and effect of endorsement.
240. Rights of survivorship.
241. Registered bonds.
242. Appropriation of revenue.
243. Payment of interest.
244. Payments.
245. Appointment of trustees.
246. Powers of trustees.
247. Trustee may be interested party.
248. Power to appoint new trustees.
249. Waiver by trustees.
250. Appropriation of revenue for sinking fund.
251. Separate sinking fund.
252. Investment of sinking fund.
253. Cessation of contribution to sinking fund.
254. Expenses to be paid out of sinking fund.
255. Deficiency in fund to be charged upon revenue.
256. Payment into sinking fund in case of default by a body.
257. Issue of duplicate and renewal of bonds certificate and promissory notes.
258. Right of registrar to compel application to issue renewal of promissory notes.
259. Consolidation and subdivision of bonds and securities.
260. Indemnity bond.
261. Immediate discharge in certain cases.
262. Discharge in other cases.
263. Summary procedure in special cases.
264. Signature to be printed on certificates.
265. Notice of trust not receivable except as provided.
266. Exemption from stamp duties.
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267. Delegation of power.
268. Inspection of register and documents, etc.
269. Power to make rules and regulations under this part.
270. Requirements of securities exchanges, etc.
271. Binding obligation on successive governments or bodies.
272. Application of enactments.
273. Interpretation of certain words used in this part.
PART XVI-ESTABLISHMENT, JURISDICTION, AUTHORITY
AND PROCEDURE OF THE INVESTMENTS AND SECURITIES TRIBUNAL
274. Establishment of the Investments and Securities Tribunal.
275. Composition of the Tribunal.
276. Constitution of the Tribunal.
277. Term of office.
278. Disqualification of members of the Tribunal.
279. Resignation and removal.
280. Salaries, allowances and other conditions of service of members of the Tribunal.
281. Filling up of vacancies.
282. Chief Registrar to the Tribunal.
283. Other staff of the Tribunal, etc.
284. Jurisdiction of the Tribunal, etc.
285. Funds of the Tribunal.
286.· Power to accept gift.
287. Account and audit.
288. Application of the funds of the Tribunal.
289. Appeals from decisions of the Commission.
290. Powers and procedures of the Tribunal.
291. Right to legal representation.
292. Onus of proof.
293. Judgment of the Tribunal.
294. Exclusion of proceedings.
295. Appeal to the Court of Appeal.
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296. Costs.
297. Further appeals. PART XVII-MISCELLANEOUS
298. Power of Minister to issue directives.
199. Power to administer oath.
300. Delegation.
30 I. Right to represent Commission before court or Tribunal.
302. Protection of action taken in good faith.
303. Penalty.
304. Criminal prosecution.
305. Offences by companies and market participants.
306. Obligation of persons to disclose information connected with activities of their
employer.
307. Change of name of capital market operators, managers, portfolio or collective
investment scheme and change of shareholding or directors.
308. Removal of appointees.
309. Power to exempt.
310. Committees of the Commission.
31 L Seal of the Commission.
312. Application and relevance of other laws not barred.
313. Rules and regulations.
3\4. Repeals and savings.
PART XVIII-INTERPRETATION AND ClTATION
315. Interpretation.
316. Citation.
Schedules.
INVESTMENTS AND SECURITIES ACT, 2007
2007 ACT NO. 29
ANACTTOREPEALTHEINVESTMENTSANDSECURITIESACT1999 ANDTOESTABLISHTHE SECURITIES AND EXCHANGE COMMISSIQN AS THE APEX REGULATORY AUTHORITY FOR THE
NIGERIAN CAPITAL MARKET AS WELL AS REGULATION OF THE MARKET TO ENSURE THE
PROTECTION OF INVESTORS, MAINTAIN FAIR, EFFICIENT AND TRANSPARENT MARKET AND
REDUCTION OF SYSTEMIC RISK; AND FOR RELATED MATIERS,
[ 25th Day of June, 2007]
ENACTEDby the National Assembly of the Federal Republic of Nigeria :
PART I-EsTABLISHMENT AND MANAGEMENT OF THE SECURITIES AND
EXCHANGE COMMISSION
1.-(1) There is established a body to be known as the Securities and Exchange Commission (in this Act referred to as "the Commission").
(2) The Commission shall be a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name.
(3) The Commission shall have power to acquire, hold or dispose of any property, movable or immovable for the purpose of carrying out any of its functions under this Act.
2. The Commission shall have its head office in a location which is by law designated as the Capital of the Federal Republic of Nigeria and may establish zonal offices in any part of Nigeria in accordance with the decision of the Board of the Commission.
3.--{ I) There shall be for the Commission a Board which shall consist of:
(a) a part-time Chairman;
(b) the Director-General and Chief executive as Accounting officer;
(c) three full time Commissioners;
(d) a representative of the Federal Ministry of Finance ;
(e) a representative of the Central Bank of Nigeria ; and
(f) two part-time Commissioners one of whom shall be a legal practitioner qualified to practice in Nigeria with ten years post call experience.
(2) A person shall not be qualified for appointmentlo the Board of the Commission unless he is a fit and proper person and:
(a) in the case of the Chairman or Director-General of the Commission, he is a holder of a' university degree or its equivalent with not less than 15 years cognate experience in capital market operations;
Commence- ment
I'.stIIIIistIma of the securities and exchange Coinmission.
Head office of the Comm;ssioo.
Composition of the board of the Coinmission.
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Duties of the beard.
Appointment and tenure of office of members of the board.
(b) in the case of any other member other than an ex-officio member, he is a holder of a university degree or its equivalent with not less than 12 years cognate experience in capital market operations or lega I practice as the case may be ; and
(c) in the case of an ex-officio member, he is not below the rank ofa director in the Ministry or Central Bank of Nigeria, as the case may be.
4-(1) The Board shall be responsible for the general administration of the Commission and, in particular, shall :
(a) formulate general policies for the regulation and development of the capital market and the achievement and exercise of the functions of the Commission ;
(b) approve the audited and management accounts of the Commission;(c) appoint Auditors for the Commission;
(d) consider and approve the annual budget of the Commission as may be presented to it by the management;
(e) establish zonal offices of' the Commission; and
(fJ carry out such other activities as are necessary and expedient for the purposes of achieving the objectives of the Commission.
(2) The Board shall, on the recommendation of the Director-General, approve the duties of the full time Commissioners.
(3) The Board shall also approve the reassignment ofthe full time Commissioners by the Director-General.
5-(1) The Director-General and the three full time Commissioners shall be appointed by the President upon the recommendation of the Minister and confirmation by the Senate.
(2) The Director-General shall hold office for a period of 5 years in the first instance and may be reappointed for a further period of five years and no more.
(3) The three full time Commissioners shall hold office in the first instance for a period of four years and may be re-appointed for a further term of four years and no more.
(4) The Chairman and part-time Commissioners (other than the ex-officio Commissioners) shall each hold office for a term offour years and no more.
(5) Notwithstanding the provisions of subsections (I) and (2) of this section, the President may extend the tenure of office of the Director-General and any of the Commissioners whose term of office has expired until a successor to such Director- General or Commissioner is appointed.
Investmere» and Securities Act All91
6. The Director-Generaland the full time Comrnissioners shall devote' their full time to the service of the Commission and while holding office shall not hold any other office or employment except where appointed by virtue of their office in the Commission into the membership of the Board of any agency of the government in Nigeria or any international organization td which the Commission is a member or an affiliate. I
7. The Director-General or, in his absence, one ofthe Commissioners norriinated by the Director-General shall be responsible for the day to day management and administration of the Commission and shall be answerable to the Board of the Commission.
"8-(1) A member of the Board shall cease to holdoffice, if he :
(a) becomes of unsound mind;
(b) becomes bankrupt or makes a compromise with creditors;' (c) is convicted of a felony or any offence involving dishonesty j
(d) is guilty of serious misconduc,t in relation to hisduties ; or.
(e) is a person' who has a professional qualification, and is disqualified or suspended (other than at his own request) from practicing hi. prefession-in any part of Nigeria by the order of any competent authority made, in respect of him personally.
(2) The Presidentmay at any time and, upon the recommendation of the M\nister remove a person to whom subsection (I) of this .~"Ftionapplies:
Provided nofulltime member of the Board of the Commission shall be removed from office without the approval of the Senate.
9.-{ I) The Director:General and the 'three full time Commissioners shall be paid such remuneration and allowances as m~y be determined by the Board of the Commission.
(2) The allowances for the part-time members shall be in accordance with the prevailing guidelines on remuneration for part-time membersof public bodies issued by the appropriate agency of the Federal Government.
1O.--{ I j .Meetings of the ,Board of the Commission shall take place as often as may be required but not less than four times i~~ny finanpial ye~r of the Commission.
(2) The Chairman shall preside at everymeeting of the Commission and in his absence, the members present at such meeting shall appoint one of.their 'members to preside. ..
(3) Five members of the Board shall form a quorum at any meeting, two of whom shall be non-executive members.
Director- General and full time Commis- sioners to be fully . devoted to the service of the Commission.
Management of the Commission.
Disqualifica- tion and cessation of appointment.
RemuneRll:ion and allowances of members of the board.
Meetings of the board of the Commission.
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FirsL Shedule
Disclosure of interest.
Code of ethics lor members of the Board.
Functions and powers ofthe Commission
(4) Unless as otherwise provided in this Act, decisions shall be by a simple majority ofthe vote ofthe members present but, in case of equality ofvote, the presiding chairman shall have a casting vote.
(S) The supplementary provisions set out in the first schedule to this Act shall have effect with respect to the proceedings of the Board of the Commission and the other matters contained therein.
II.--{ I) Amember of the Board of the Commission who is directly or indirectly interested in :
(a) the affairs of any company or enterprise being deliberated upon by the Board of the Commission; or
(b) any contract made or proposed to be made by the Board of the Commission shall, as soon as possible after relevant facts have come to his knowledge, disclose the nature of his interest to the Commission at the meeting of the Board of the Commission.
(2) A disclosure made under subsection (I) of this section shall be recorded in the minutes of the meeting of the Board of the Commission and the member after the disclosure shall ;
(a) not participate or continue to participate in any deliberation or decision of the Board of the Commission with regard to the subject-matter in respect of which his interest is so disclosed; and
(b) be excluded for the purpose of constituting a quorum of the Board of the Commission from any deliberation or decision on the subject matter.
12. The members of the Board of the Commission shall subscribe to, and be bound by a code of ethics to be approved by the Minister.
PART II-FUNCTIONS AND POWERS OF THE COMMISSION
13. The Commission shall be the apex regulatory organisation for the Nigerian capital market and shall carry out the functions and exercise all the powers prescribed in this Act and, in particular, shall ;
(a) regulate investments and securities business in Nigeria as defined in this Act;
(b) register andregulate securities exchanges, capital trade points, futures, options and derivatives exchanges, commodity exchanges and any other recognised investment exchange;
(e) regulate all offers of securities by public companies and entities;
(d) register securities of public companies;
(e) render assistance as may be deemed necessary to promoters and investors wishing to establish securities exchanges and capital trade points;
(I) prepareadequate guidel ines andorganise trainingprogrammes and disseminate information necessary for the establishment of securities exchanges and capital trade points;
Investments and Securities Act ZOO1'No. 29
(g) register and regulate corporate and individual capital market operators as defined in this Act;
(h) register and regulatethe workings ofventure capital funds and collective investments. schemes in.whatever form ;
(I) facilitate the establishment of a 'nationwide system fur securities trading in the Nigerian capital market in order to protect investors and maintain fairand orderly markets;
U) facilitate the linking of all markets in securities with information and communication technology facilities;
(k) act in the public interest having regard to the protection of investors and the maintenance of fair and orderly markets and to this end, establish a nationwide trust scheme to compensate investors whose losses are not covered under the investors protection funds administered by securities ex~hanges and capi~ltrade, points;
(() keep and maintain a register offoreign portfolio investments.;
(m) register and regulate securities. depository companies, clearing and senlement companies, custodians of as_sets and-securities, credit rating agenciesand such other agencies and intermediaries;
(n) protect the integrity of the securities market against all forms of abuses including insider dealing •.
(0) promote and register self regulatoryurganisatiorrs including securities exchanges, capital trade points and capital market trade associations to which it may delegate its powers; -
(pj review, approve' ant! regulate mergers, acquisitiorlS; takeovers and ~nforms of business combinations and affected transactions of all cornpanles asdefinedin this Act;
(q) authorise and regulate cross-border securities transactions;
(r) call for information from and inspect.conductinquiriesandaadit of'seeurities exchanges; capital market operators, collective investment schemes and, all: other regulated entities ;
(s) promote investors' education and the training of all categories of intermediaries in the securities industry ;
(t) call for, Or furnish to any person, such information as may be considered necessary by it for,.Ihe efficient discharge of its functions ;
(u) levy fees, penalties and administrative costs of proceedings or other charges .on any person in relation to investments and securities business in Nigeria in accordance with the provisions of this Act;
(v) intervene in the management and control of capital market operators which it considers has failed, isfaUing or.in crisis including entering into the premises and doing whatsoever the Commission deems necessary. for the protection of investors;
A 894 2007 No. 29 [vestment and Security Act
Powers to establish departments
Appointment ofthe Secretary and other staff of the Commission.
Remunera- ricn of the Secretary and other staff of the Commission.
Duties of the Secretary.
(w) enter and seal up the premises of persons illegally carrying Oil capital market operations;
(x) in furtherance of its role of protecting the integrity of the securities market, seek judicial order to freeze the assets (including bank accounts) of any person whose assets were derived from the violation of this Act, or any securities law or regulation in Nigeria or other jurisdictions;
(y) relate effectively with domestic and foreign regulators and supervisors of other financial institutions including entering into co-operative agreement on matters of common interest;
(z) conduct research into all or any aspect of the securities industry;
(aa) prevent fraudulent and unfair trade practices relating to the securities industry;
(bb) disqualify persons considered unfit from being employed in any arm of the securities industry;
(cc) advise the Minister on all matters relating to the securities industry; and (dd) perform such other functions and exercise such other powers not inconsistent
with this Act as are necessary or expedient for giving full effect to the provisions of this Act.
14. The Commission may establish specialised departments for the purpose of regulating and developing the Nigerian capital market.
PART III-STAFF OF THE COMMISSION
15.--(1) There shall be for the Commission a Secretary who shall be appointed by the Commission.
(2) The Secretary shall be a legal practitioner of not less than 10 years post call experience.
(3) The Secretary shall act as Secretary to the Board of the Commission and its committees and carry out other functions as may be prescribed by the Board.
(4) There shall also be appointed by the Commission other staff as the Commission may deem necessary for the efficient performance of its functions under this Act.
16. The remuneration (including allowances) and the terms and conditions of service of the Secretary and other staff of the Commission shall be determined by the Board of the Commission.
17.--{I) The Secretary shall :
(a) attend the meetings of the Board of the Commission, and its committees and render all necessary secretarial services in respect of the meetings and advise on compliance by the meetings with applicable la"Ysand regulations;
4"estrll~;,tantfSecu'lty Act
(b) keep and maintain records of the Boord of the Commission ; and
(e) carry out such administrative and other secretarial duties asmay be required by the Board of the Commission or the Dlrect(}r: General; ,
(2) The Secretary shall exercise the powers of the Board only with the authority of the commission.
18.-(1) Every staff of the Commission shall be entitled to pension and other retirement benefits as prescribed by law.
(2) Nothing in this section shall prevent the appointment of a person to any office on such terms and conditions, 'which preclude the grant of pension and other retirement benefits.
Service in the Commission to be pensionable.
PART IV-FINANCIAL PROVISIONS
19.--(1) The Commission shall establish and maintain a fund (in this Act referred Fundsof the to as "the Fund") into which shall be paid the following: Conunissioo.
(a) funds provided to the Commission by the Federal Government;
(b) penalties, fees, charges and administrative cost of proceedings ; and (e) monetary gifts, contribution s and other funds that may be received by the Commission. - ,
(2) The Commission shall maintain and operate bank accounts for funds as approved by the Board of the Commission.
20. The Commission may apply the proceeds of tbe Fund established under section 19 of this Act to :
Application of the funds of the Conunissioo.(a) meet the cost of administration of the Comrnission ;
(b) reimburse members-of the Commission or any committee set up by the Commission for expenses authorisedor: approved by the Commission ; ,
(c) pay the salaries, fees or other remuneration or allowances, pensions and gratuities payable to the employees of the Commission;' .,
(d) maintain any property acquired by or vested in the Commission;
(e) implement all or any of the functions of the Commission under this Act or any matter connected with those functions ; and
(f) meet any capital expenditure approved by the Board ofthe Commis~ion.
21. (I) The Commission shall establish a reserve account into which all surpluses Reserve from the Fund shall be paid. account.
(2) Disbursement from the reserve account shall be approved by the Board of the Commission.
(3) The Commission may invest funds in the reserve account in securities prescribed by the Trustee Investments Act and such other modi tying or substituting legislation or in such other securities as may be approved by the Board of the Commission.
No.16of 1957.
A 896 1007 No. 19 Investmems and Securtties Act
Power to accept gifts
Penalties, fees, etc. to he retained and utilized by the Commission.
Borrowing by the Commission
Investment by the Connuission
Annual estimates, accollntand audit
Annual report
Registration of securities exchanges and capital trade points.
22.-{ I) The Commission may accept gifts ofland, money or other testamentary dispositions, endowments and contributions on such terms and conditions, if any, as may be specified by the donor of the gift.
(2) The Commission shall not accept any gift if the conditions attached by the donor are inconsistent with the functions and objectives of the Commission.
23. The Commission is entitled to charge, retain and utilise for its purposes:
(a) penalties imposed for violation of this Act and the rules and regulations made thereunder; and
(b) fees collected for the services rendered by the Commission under this Act, including recovery of costs of administrative proceedings.
24. The Commission may, subjcctto the approval of the Board, borrow by way of loan a specified amount of money as it may require for meeting its obligations and discharging its functions under this Act.
25. The Commission may, subject to the provisions ofthis Act and the conditions of any trust created in respect of any property, invest all or any of its funds as may be approved by the Board.
26.-{ I) The Board ofthe Commission shall cause to be prepared, not later than the thirtieth day of September in each year, an estimate of the income and expenditure of the Commission during the next succeeding year and when prepared, they shall be submitted to the Minister and the National Assembly.
(2) The Commission shall cause to be kept, proper books of records and accounts which shall be audited by auditors appointed by the Board of the Commission
27. The Commission, shall not later than three months after the end of each year, submit to the Minister and the National Assembly, a report on the activities and administration of the Commission during the immediately preceding year and, shall include in such reports, audited accounts of the Commission and the report of the Auditor on the accounts.
PART V-REGISTRATION AND REGULATION OF SECURITIES EXCHANGES, CAPITAL
TRADE POINTS ·AND OTHER SELF REGULATORY ORGANIZATIONS
28.-{ I) No securities exchange or capital trade point as defined in section 315 of this Act shall commence operation unless it is registered with the Commission in accordance with the provisions of this Act" and the rules and regulations made thereunder.
(2) An application for registration as a securities exchange or capital trade point shall be made to the Commission in the prescribed form and in the manner specified by the Commission.
29.-( I) Every securities exchange or capital trade point shall be" 'bod, corporate incorporated under the Companies and Allied MattersAct,
(2) The Commission may register a body corporate as a securities exchange or capital trade point if it is satisfied that the rules of'the body corporate make satisfactory provisions:
(a) for the exclusion from its membership persons who are not of good character and who do not possess a high de~ree of business integrity; , "
(b) for the expulsion, suspension or discipline of members for conduct inconsistent withjust and equitable principles in the transaction of securities business or for contravention of or failure-to comply withthe rules of the securities exchange or capital trade point or the provisions of this Act;
(c) with respect to the conditions under which securities maybe listed for trading on that particular securities exchange or capital trade point;
(d) with respect to the conditions governing dealings in securities by the members ;
(e) with respect to the class or classes of securities which may be dealt in by members ; and
(f) with respect to a fair representation of persons in the selection of members of the Board ofthe securities exchange or capital trade pail\! and the administration of its affairs and provided that listed companies and investors shall each be represented by one or more members on its board.
(3) The Commission, in granting approval to register a securities exchange or capital trade point under this section, shall ensure that the interest of the public will be- served by the grant of the approval.
(4) The Commission shall issue a Certificate of registration to a body corporate registered pursuant to this section,
30.-(1) The Commission may by order revoke the certificate of registration granted under section 29 of this Act, if:
(a) the body corporate ceases to operate as a securities exchange or capital trade point within the meaning of this Act;
(b) the body corporate is wound up ; or
(e) the body corporate is operating in a manner detrimental to the interests of investors and the public,
(2) No order of revocation under this section shall be made unless the bOQY corporate has been given the opportunity of being heard. '
31.-(1) Where an amendment is-made-to the rules or the listingrequirements of a securities exchange, capital trade point or other self'regulatotyorgarrlsation, whether by'way of recision, amendment, alteration, deletion, substitutionoraddltion, ti)e.Jiloard of the securities e~ch~g~,capitl trade point -or other self regulal;ol}' org~atiol1 shall forward a written notice ofthe amendmentto the Commission for.appro~~1,
,J
Couduions for registration. No I of 1990,
Revocation of' certificate ofa securities exchange or capital trade point.
Approval of amendments to listing rules.
AS9S 1007 No. 29 Investments and Secruities Act
Role or securities exchange, capital trade point ami other self n:glllator~ orgamsa- tions.
Securities exchange. capital trade point or self regulatory organ isation 10 g1\'e notice of disciplinary actions, etc.
Review of disciplinary actions taken by a securities exchange, capital trade point or self regulatory organisation.
(2) The Commission shall notify the securities exchange, capital trade point or other self regulatory organisation as to whether or not the Commission approves the whole or any specified part of the amendment in question, and until such notification is received, the amendment shall be of no effect.
(3) Nothing in this section shall preclude the Commission, after consultation with the board of a securities exchange, capital trade point or other self regulatory organisation from amend ing the rules or the listing requirements of the securities exchange, capital trade point or other self regulatory organisation by a notice in writing specifying the amendment and the date the amendment shall come into effect.
(4) Any notice under this section may be served personally or by registered post.
32,--(1) Subject to the powers of the Commission under this Act, a securities exchange, capital trade point or any other self regulatory organisation shall, as part of its primary responsibility, call for information from, inspect and conduct inquiries and audit of its members.
(2) A securities exchange, capital trade point or self regulatory organisation, shall at the end of every quarter file a detailed report on its surveillance and enforcement activities with the Commission.
(3) Nothing in this section shall preclude the Commission from carrying out inspections, or conducting enquiries or audit of any member of a securities exchange, capital trade point or other self regulatory organisation.
33. Where a securities exchange capital trade point or other self regulatory organisation reprimands, fines, suspends, expels or otherwise takes disciplinary action against a member of the securities exchange, capital trade point or other selfregulatory organisation, the securities exchange, capital trade point or self regulatory organisation shall, within 7 days notify the Commission in writing ofthe name and other particulars of the member, the nature of and reason for the action taken by the securities exchange, capital trade point or other self regulatory organisation against the affected member.
34.--(1) The Commission may review any disciplinary action taken by a securities exchange, capital trade point or other self regulatory organisation against its members and may affirm or set aside such decision after giving the member and the securities exchange, capital trade point or self regulatory organisation an opportunity of being heard.
(2) Nothing in this section shall preclude the Commission from suspending, expelling or otherwise imposing or causing disciplinary action to be taken against a member of a securities exchange, capital trade point or other self regulatory organisation where a securities exchange, capital trade point or other self regulatory organisation fails to act against a member:
Provided that, before exercising the power conferred upon it by this subsection, the Commission shall give the affected member and the securities exchange, capital trade point or self regulatory organisation an opportunity of being heard.
Investments and Securities Act 2007 No. 29 A 199
35.-{1) The Commission may, where it deems appropriate, i-c.ucd ircctivcs to a securities exchange, capital trade point or any other self regulatory organisation with respect to :
(a) trading on or through the facilities of that securities exchange, capital trade point or self regulatory organisation or pertaining to any securities listed. on the securities exchange, capital trade point or s~lf regulatory organisation;
(6) the manner in which a securities exchange, capital trade point or self regulatory organisation carries on its business including the manner of reporting off-market purchases ; or
(e) any other matter which the Commission considers necessary for the effective administration of this Act, and the, securities exchange, capital trade point or self regulatory organisation shall comply with the directives,
(2) No action shall be competent before any court of law or tribunal with regard to any directive by the Commission under subsection (I) of this section without the joinder of the Commission as a party.
(3) A securities exchange, capital trade point or any other self regulatory organization which, wirhout reasonable excuse, fails' or refuses to comply with a directive given under subsection (I) of this section shall be liable to a penalty of fIIl,OOO,OOOand a further penalty of not less than /