The Securities and Exchange Commission (SEC) has released new guidelines that will mandate investors in the Nigerian capital market to conduct all activities regarding the market electronically.
In the guideline tagged: Minimum Operating Standards for Information Technology for Capital Market Operators, SEC seeks to mandate compulsory adoption of information and communication technology (ICT), particularly web-based applications and devices, for virtually capital market transactions.
It said the purpose of the guidelines is to establish a threshold of operational efficiency in the capital market through the effective adoption of information technology in driving business operations and ensure integrity.
A statement that was issued by its spokeswoman yesterday Efe Ebelo said when approved, the rule will apply to all capital market operations, with particular emphasis on investor-facing functions such as securities trading, fund management, share registration and clearing and custodial services, among others.
The new rules mandate all capital market operators to have well-secured and functional website as well as functional electronic mailing system, either hosted privately or using a cloud service provider, with domain name owned and registered by the capital market operator. Once the rules come into effect, the use of free email providers and private emails like Yahoomail, Gmail and Hotmail, among others, shall become unacceptable for official transactions.
Under the proposed framework, stockbrokers will be “required to have websites and web applications that allow investors to securely create and manage their equities accounts online, make enquiries and receive customer support using chat-bots or other interactive programmes from web browsers”. As the largest and main trade group, digitisation of stockbroking operations is expected to improve accessibility to the market for retail investors and to drive market penetration and inclusion.
Also, fund and asset managers who run the country’s burgeoning collective investment schemes, will be mandated to “have websites and web applications that allow investors to securely create and manage investment accounts online, make enquiries using chat-bots or other interactive programs from web browsers”.
Fund and asset managers are also required to have mobile applications that provide free access to the full stack of their service offering and allow retail investors to securely create and manage investment accounts online, make enquiries and receive in-app customer support”.
In a major move that may finally bridge the gap fueling unclaimed dividends, all registrars, central securities depositories and clearing houses will now be required to digitise their operations, as a regulatory requirement rather than optional service provision.
Under the new framework, custodians and trustees are required to have websites and web applications that allow their clients to securely create and manage their accounts online, make enquiries and receive customer support using chat-bots or other interactive programs from their web browsers.
