SEC cautions  fund managers against  holding clients’ funds, securities

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 Fund managers still in the habit of holding on to clients’ funds and securities  must desist from the act or face the wrath of the apex regulator.

The Director General of Securities and Exchange Commission (SEC), Mr Lamido Yuguda, who handed down this warning  on Friday at the post-Capital Market Committee (CMC) press briefing held in Lagos , said stiffer measures await violators.

 He said that holding on to clients’ funds and securities is a clear violation of the Commission’s Consolidated Rule 95 (1-2),even as he  also reminded the Fund Managers that all funds and securities of clients being managed by their firms must be vested with custodians.

Yuguda drew the attention of Fund Managers to issues that arose from the Commission’s recently concluded inspection of Fund/Portfolio Management operations whereby many Fund Managers managing Discretionary and Non-Discretionary Products and Portfolios were yet to seek a ‘No Objection’ of their products and portfolios from the Commission. He noted that this was also a violation of the Commission’s Rules.

Importance of fintechs: Meanwhile, the SEC DG emphasised the increasing importance of Fintech, Sustainable Finance, Financial Inclusion and Non-Interest Finance. He reiterated SEC’s commitment to continue creating awareness, imparting knowledge and engendering public participation in these topical areas.

Non-Interest Finance: He disclosed that the Minister of Finance, Budget and National Planning has approved Non-Interest Finance (taxation) regulation, which has already been gazetted.

“This has important implications for the market towards encouraging new issuances of Non-Interest Capital Market products and services. It is expected that Issuers and Market Operators will take advantage of this by creating more non-interest finance products,” he said.

Unclaimed dividends: Yuguda expressed appreciation over the recent intervention of the House of Representatives Committee on Capital Markets and Institutions on unclaimed dividends.

“The Committee is investigating the rising value of unclaimed dividends and unremitted withholding tax on dividends. The Commission expressed its readiness to provide all the necessary support to the Committee to enable it to carry out its assignment,” he said.

He stated that the Commission is rebuilding the E-Dividend Management Mandate System (e-DMMS) platform which according to him involves having a centralized submission of E-dividend mandate forms, an Application Programming Interface (API) for Banks and Registrars, and a revamped web interface among others.

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