By Providence Obuh

Regulatory infractions involving unauthorized sale of clients’ shares contrary to the rules and regulations governing dealing members of the Nigerian Stock Exchange (NSE) is now on the increase.

File photo: The floor of Stock exchange

Recently, the NSE announced the expulsion of some of the dealing members and the revocation of the licences of two firms for infractions. Shareholders in this interview said that sanctions will serve as deterrent to others, while warning that fellow shareholders to be cautious by differentiating between jobbers and genuine stockbrokers. Excerpts:

Mr. Adebayo Adeleke, Gen. Secretary, Independent Shareholders Association of Nigeria: Revocation of licences is a very good step and will serve as a deterrent to others. If you look at the gravity of the offence, how else do you sanction a stock broking house?

I am sure if it is a particular broker, it will be the professional licence of that broker that will be affected but if it is found out that it is done with the knowledge of the entire stock broking house, that means the house too should be sanctioned and if we don’t take some very strict disciplinary actions, this market will not enjoy the confidence that all of us have been preaching about.

If people are confident that they will get justice anytime there are infractions, they will report it. What has happened in the past was a situation where even though there are infractions, a lot of shareholders, especially routine shareholders do not know their right and they do not know where to go and lodge their complaint and some who have complained in the past appear not to have gotten some form of justice abruptly.

I believe this can be a step in the confidence driving process that people now know that when there are infractions, they can easily lodge complaints and they will be listened to and if the house or broker is found culpable they will suffer the consequences.

Mr. Taiwo Oderinde, Chairman, Proactive Shareholders Association of Nigeria: It is criminal for any stockbroker to be involved in unauthorized sale of shares and this means breach of contract.

If the licence of a stockbroking firm is revoked, I believe that will serve as a deterrent to others but if they have institutionalized cause, then they can weigh it with what happens in other jurisdictions with the same problem in our own market, so that they do not come out with an arbitrary pronouncement, fine and revocation of licences.

On the other hand, revocation is too strict a measure because if you have 20 stockbrokers working in your firm, I don’t expect that all of them should be dubious. There is no way you can have 100 percent of people to be saints.

Revoking of licences is grave. There is need to look at it critically and if there is need to go to the National Assembly to seek for a kind of amendment in their guidelines or better still I recommend that they go to IST or the international tribunal and seek their opinion on such issues and to see how it is being done in other jurisdiction before they come out with sanctions.

In this market, there are jobbers, imposters, genuine stock brokers, genuine firms and dubious firms. If anyone is coming in fresh, you can seek the opinion of those who have been in the market.

When I started buying shares, one of my mentors of blessed memory, is the one that recommended the stockbroking firm am using till date.

Am still with that stockbroking firm and they are doing well, I have never heard anything negative about that firm because they have gotten a record over the years, of being a very good stock broking firm.

There is need for new members to always seek opinion and advice of others before jumping into these jobbers or any of the stockbroking firms. I believe it is good to seek advice from people who have been in the market before for them to share their experience or give a guideline on how they started dealing with a particular stockingbroking firm or broker.