KEY POINTS
- SEC proposes jail terms and fines for Ponzi scheme operators.
- The bill modernizes regulations to address Fintech and digital assets.
- New provisions enhance investor protection and market transparency.
The Securities and Exchange Commission (SEC) has proposed stringent penalties, including a N20 million fine and a 10-year jail term, for operators of Ponzi and pyramid schemes. These measures are part of the Investments and Securities Bill (ISB) 2024, currently under consideration by the National Assembly.
The bill, which aims to repeal the Investment and Securities Act of 2007, explicitly prohibits Ponzi and other illegal investment schemes. SEC Director-General Dr. Emomotimi Agama emphasized the need to strengthen regulatory provisions to protect Nigerians from fraudulent fund managers.
The Punch reported that, in the proposed legislation, promoters and operators of prohibited schemes would face a minimum fine of N20 million or up to 10 years in prison—or both—if convicted. This marks a significant step toward discouraging fraudulent investment activities in the country.
Modernizing Nigeria’s capital market
At a public hearing held Thursday in Abuja, Senate President Godswill Akpabio, represented by Senator Binos Yaroe, highlighted the importance of the ISB 2024 in creating a transparent and competitive financial market. He described the bill as a “beacon of hope” for Nigeria’s economic transformation.
Senator Osita Izunaso, Chairman of the Senate Committee on Capital Market, noted the increasing influence of Fintech in the sector. He stressed the need for a robust legal framework to address digital assets and other emerging technologies reshaping the capital market.
The bill also introduces provisions to regulate commodity exchanges, warehouse receipts, and investor protection funds. These measures aim to enhance investor confidence and ensure fair compensation for those who suffer financial losses due to market malpractices.
Catalyzing economic growth through capital markets
According to SEC, the bill includes reforms designed to reposition Nigeria’s capital market as a catalyst for economic diversification and long-term development. The new framework will streamline regulatory ambiguities, foster international competitiveness, and enable medium to long-term financing for critical projects.
Dr. Agama affirmed the bill’s importance, stating, “World-class capital markets are indispensable to the functioning of a modern economy. The enactment of the ISB 2024 will be a pivotal step for Nigeria’s economic advancement.”
With these measures, SEC and the National Assembly aim to ensure the capital market can effectively drive national economic transformation while safeguarding investors from fraudulent activities.
