The regulatory arm of the Nigerian Exchange Group- NGX Regulations Company (NGXRegco), on Tuesday reminded licensed stockbrokers trading on the NGX Exchange Limited that cash payments the purchase and sale of securities is strictly prohibited in line with the Rulebook of The Exchange, 2015 (Dealing Members’ Rules). Specifically, NGXRegco reminded the stockbrokers of Rule 11.13 that strictly prohibits cash payments for the purchase and sale of securities; while Rule 21.6 requires that “all payments for purchase of securities shall be made either by personal cheque, bank draft or electronic money transfer subject to the observance of the provisions of the Money Laundering Prohibition Act of 2012 as amended, and the Prevention of Terrorism Act, 2013 as amended.
Continuing, it noted that “all payments for sale of securities shall be made either by cheque, bank draft, electronic money Transfer in favour of the account holder in Central Securities and Clearing System Plc or in the name on the securities certificate evidencing the ownership of the securities.
According to the circular with the reference: NGXREG/BDR/CIR01/23/09/26
(k), signed by Olufemi Shobanjo, Head, Broker Dealer Regulation, “there shall be no cash handling in a representative office except petty cash used for administrative expenses. All representative offices shall display in a conspicuous location in their offices, a message indicating that no cash would be accepted in respect of any transactions.
“All transaction payments made by clients shall be by bank draft or cheque or bank transfer or any other means of payment accepted by the Central Bank of Nigeria (CBN’), and a copy of the evidence of such payment shall be sent to the Head or branch office within five business days of the date of the transaction,” he stressed.
Head, Broker Dealer Regulation
Failure to comply with the provisions of the Rules, the circular warned, “will attract regulatory sanctions as appropriate.”