Only Registered Operators Can Earn Brokerage Commission- SEC

The Securities and Exchange Commission (SEC), on Monday, reminded capital market operators to desist from the unethical practices of sharing brokerage fees and commission with persons who are not duly registered and therefore ineligible with the aim of inducing investment.
A statement by the commission listed the unauthorized operators who are not eligible to be paid commission as private banking officers, asset/fund managers, PFA’s and other institutional investor classes, which it warned could lead to strict regulatory actions in accordance with existing rules and regulations.
Those operators engaged in this emerging trend of unethical conduct, the statement continued, include: brokers, issuing houses/book runners and other receiving agents in primary and secondary market transactions.
According to the SEC, “only capital market operators duly registered by the Commission are eligible to be paid brokerage fee/receiving agents’ commission and such Operators shall not pay or offer a percentage of the commission earned from services provided in a transaction as an incentive for investment.
“Any capital market operator found to engage in this practice or similar acts shall be subject to strict regulatory actions in accordance with the rules and regulations of the Commission.
The SEC, therefore, enjoins the public to utilize the Commission’s whistleblowing mechanism to provide information on any known or suspected case for necessary action.

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