A broker-dealer is a person or firm in the business of buying and selling securities for its own account or on behalf of its customers.
Broker-dealer registration as the focus of this article is governed in Nigeria by the Securities and Exchange Commission (SEC) and carries a set of requirements that can be broken down into :-
– Payment requirements
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– Sponsored Individual Requirements
– Applicant Company requirements
Payment Requirements
– A filing/application fee of 50 Thousand Naira.
– A processing fee of 200 Thousand Naira.
– A registration fee of 500 Thousand Naira.
– A sponsored individual fee of 50 Thousand Naira per sponsored individual.
– A minimum paid up share capital of 300 Million Naira.
– A current fidelity insurance bond covering at least 20% of the minimum paid-up capital as stipulated by SEC rules and regulations.
Sponsored Individual Requirements
- A minimum of 4 sponsored individuals, one of whom shall be a compliance officer.
- The managing director of the company is to be among the sponsored individuals.
- Full postal addresses of immediate previous employers, bankers (with current account numbers) and nominated referees of sponsored individuals.
- Detailed CVs of sponsored individuals and directors which should include dates & details of activities arranged from secondary school to date .
- Copies of credentials of sponsored individuals including secondary school and NYSC certificates with originals for sighting purposes.
- Evidence of having the minimum 4(Four) years post-graduation experience needed to perform the function as stipulated by SEC rules and regulations.
- Police clearance reports for each sponsored individual. Each sponsored individual is to report at the SEC Head office or Lagos zonal office with 2 recent passport photographs for the process.
- Valid means of identification
Applicant Company Requirements
- A profile of the company.
- The names of addresses of the company’s subsidiaries and percentage holdings as well the type/nature of the businesses.
- Evidence of payment of shares allotted to the shareholders.
- Bank statements for accounts operated by the company for the last 6 months.
- A copy of the dealership certificate of the authorized dealing clerk being sponsored by the company
- The dealing license or an exchange.
- A listing in a separate schedule and valued at the current marketplace of securities owned by such broker or dealer or in which the broker or dealer has an interest.
- An Operational manual or organizational chart of the company.
- A business plan.
- A copy of the company’s certificate of incorporation.
- A copy of the company’s memorandum/ articles of association.
- Corporate Affairs Commission (CAC) forms showing a statement or share capital, returns on allotments and particulars of its directors.
- Latest audited accounts or audited statements of affairs of the company with a 60/40 cash to assets ratio.
- A sworn undertaking signed by a director of the company or its company secretary to keep proper records and render returns as may be specified by SEC .
- A sworn undertaking to abide by SEC rules and regulations as well the Investment & Securities Act (ISA) signed by a director of the company or its company secretary.