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Registration Requirements For Broker-Dealers in Nigeria

Registration Requirements For Broker-Dealers in Nigeria

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

  1. A minimum of 4 sponsored individuals, one of whom shall be a compliance officer.
  1. The managing director of the company is to be among the sponsored individuals.
  1. Full postal addresses of immediate previous employers, bankers (with current account numbers) and nominated referees of sponsored individuals.
  1. Detailed CVs of sponsored individuals and directors which should include dates & details of activities arranged from secondary school to date .
  1. Copies of credentials of sponsored individuals including secondary school and NYSC certificates with originals for sighting purposes.
  1. Evidence of having the minimum 4(Four) years post-graduation experience needed to perform the function as stipulated by SEC rules and regulations. 
  1. 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.
  1. Valid means of identification

Applicant Company Requirements

  1. A profile of the company.
  1. The names of addresses of the company’s subsidiaries and percentage holdings as well the type/nature of the businesses.
  1. Evidence of payment of shares allotted to the shareholders.
  1. Bank statements for accounts operated by the company for the last 6 months. 
  1. A copy of the dealership certificate of the authorized dealing clerk being sponsored by the company
  1. The dealing license or an exchange.
  1. 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.
  1. An Operational manual or organizational chart of the company.
  1. A business plan.
  1. A copy of the company’s certificate of incorporation.
  1. A copy of the company’s memorandum/ articles of association. 
  1. Corporate Affairs Commission (CAC) forms showing a statement or share capital, returns on allotments and particulars of its directors. 
  1. Latest audited accounts or audited statements of affairs of the company with a 60/40 cash to assets ratio. 
  1. 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 .
  1. 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.

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