Reps Propose 10-year Jail Term For Ponzi Scheme Operators

An expense to rescind the Investments and Securities Act (ISA) 2007 and enact the Investments and Securities Act to establish Securities and Exchange Commission (SEC) has scaled the second reading.The bill, which seeks to make SEC the peak regulatory authority for the Nigerian capital market, prescribes a 10-year jail term for Ponzi scheme operators, in the country, among others.The proposed legislation, which is sponsored

by Babangida Ibrahim, likewise empowers SEC to shut down all illegal financial investment schemes.During the plenary on Thursday, January 20, Ibrahim, in his lead argument,

said current trends in the capital market has made the evaluation of the Investments and Securities Act, Act No. 29 of 2007, enacted 14 years back, imperative.He noted that the proposed legislation would make the Nigerian capital market conform with worldwide finest practices. According to him, the significant essence of the costs are introduction of brand-new arrangements to regulate the activities of financial market infrastructure, along with netting and personal bankruptcy provisions to safeguard financiers in derivatives agreements. There are brand-new provisions on the guideline of Financial Market Intermediaries (FMIs)such as Central Counter Parties(CCPs), Clearing Houses, Trade Depositories

etc.The general law of insolvency would have no effect on market contracts or action taken under the guidelines of an exchange, FMI with respect to market agreements, or an action

taken to transfer any collateral.Furthermore, no entity, trade association can operate or hold itself out as a Self Regulatory Organization(SRO)unless recognised or registered as such by SEC. The obligations of SRO are likewise well spelt out, while a brand-new provision has actually been introduced on netting of financial contracts.”We are enhancing arrangements connecting to effective guideline of financial investment scheme. Recently there is a lot of complaints by Nigerians to the degree the Federal Government itself put some embargo on some accounts on Ponzi schemes. So since the time of signing the current account, the ponzi plan was not out there in Nigeria. So we need to put some regulations to monitor them.” ToriNG