The Securities and Exchange Commission (SEC) says the Investments and Securities Bill (ISB) 2024 proposes a penalty of not less than N20 million or 10 years’ imprisonment or both for Ponzi scheme operators.
The director-general of SEC, Emomotimi Agama, said this at the public hearing of the bill on Thursday in Abuja.
Mr Agama said the bill also prescribed stringent jail terms and other stiff sanctions for the promoters of Ponzi schemes.
He said the SEC introduced an express prohibition of Ponzi/Pyramid Schemes and other illegal investment schemes to ensure that illegal fund managers were not allowed to fleece unsuspecting Nigerians of their funds.
Mr Agama said the commission had observed areas that required review in the ISB 2007 to strengthen existing provisions, remove ambiguities, and introduce new provisions that would enhance the international competitiveness of the Nigerian capital market.
He said the move was to reposition the market to catalyse national economic transformation.
”A vital provision in the bill is the new stipulation that the Investor Protection Fund (IPF) set up by the securities exchanges would compensate investors who suffer pecuniary losses arising from the revocation or cancellation of the registration of a dealing member firm.
“In the extant law, compensation from the IPF is limited to instances of ‘bankruptcy,’ ‘insolvency,’ or other acts of ‘negligence’ by a dealing member firm.
“This bill also contains an entirely new part that provides for the regulation of commodity exchanges and warehouse receipts.
“The passage and enactment of the Investments and Securities Bill will be a pivotal step in this direction,” he said.
In his remarks, Senate President Godswill Akpabio said the ISB 2024 was a beacon of hope for the nation’s economic landscape.
Mr Akpabio, represented by Senator Binos Yaroe, said the country was taking a bold step towards modernising its financial market and fostering transparency by repealing the ISB Act 2007.
He said the bill was designed to create a more robust and equitable environment for investments to thrive in an increasingly competitive global economy.
“Together, we can ensure that the ISB 2024 is not just a piece of legislation but a transformative tool that propels Nigeria towards a future of economic resilience and prosperity,” Mr Akpabio said.
The chairman of the Senate Committee on Capital Market, Osita Izunaso, said a well-developed capital market, which served as the bedrock for long-term capital raising and industrial development, was imperative.
Mr Izunaso said the capital market required a strong legal framework that conformed with ever-evolving societal and global realities.
(NAN)
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