SEC to sue unlicensed crowdfunding firms

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The Securities and Exchange Commission (SEC) has pledged to prosecute unregistered investment crowdfunding platforms if they fail to register with the commission.

SEC Chief Executive Lamido A. Yuguda said the decision, which was made at the SEC’s Virtual Capital Markets Committee meeting, said the measure was passed as part of our efforts to stem the tide of fraudulent activity in the sector.

Yuguda said the commission has an existing regulatory framework that allows private companies with the required structure and mechanism to raise capital from the public through crowdfunding, while urging crowdfunding platforms to s register with the commission.

He reiterated his commitment to fulfilling his mandate of protecting investors and creating an environment conducive to market operations.

The CEO also urged all stakeholders to continue working towards reducing the volume of unclaimed dividends, as severe penalties would be imposed on any stakeholder whose actions appear to thwart his efforts.

“The commission noted that despite its efforts in implementing the Electronic Dividend Mandate Management System (eDMMS), investors continued to complain about the delays in electronic dividend payments and the cumbersome manual process, among other shortcomings,” he said.

Similarly, the SEC has urged the federal government to consider its proposal to exempt corporate bonds from paying tax.

The federal government had in 2012 exempted bonds and short-term government securities from income tax for 10 years, which expired on January 1, 2022.

But speaking on the corporate bond tax, the SEC boss said the move to seek a tax holiday would help unlock the attractiveness of the corporate bond market.

He said: “The commission is continuing its dialogue with the Minister of Finance, Budget and National Planning on the request for corporate bond tax exemption.

“For any asset class, investing is a function of many considerations. Taxation is just one of those considerations. an important consideration, especially when the tax rate is high.”

The SEC CEO also said the revised capital market blueprint would be launched by November after it is approved by the federal government.

The Capital Market Master Plan Implementation Board had in June this year submitted the revised Nigerian Capital Market Master Plan (2021-2025) to the Minister of Finance, Budget and National Planning.

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