In a decisive move to uphold regulatory compliance and investor protection, the Securities and Exchange Commission (SEC) has taken stringent action against Mainland Trust Limited and Centurion Registrars Limited, signaling a zero-tolerance stance on infractions in the Nigerian capital market.
The Commission, in separate circulars issued over the weekend, announced the immediate cancellation of Mainland Trust Limited’s registration and the suspension of Centurion Registrars Limited, along with its directors and sponsored individuals. These sanctions were imposed following the firms’ failure to comply with regulatory directives and their inability to resolve multiple complaints from investors.
A Pattern of Non-Compliance
For industry observers, this crackdown serves as a reminder of the SEC’s commitment to weeding out errant operators. The regulatory body, invoking Section 38(4) of the Investments and Securities Act, 2007, and Rule 34(1)(e) of its Consolidated Rules and Regulations 2013, justified the action against Mainland Trust Limited, citing a history of unresolved grievances and non-adherence to directives. Consequently, investors were urged to liaise with the Central Securities Clearing System (CSCS) for guidance on transferring their stocks to alternative brokers.
Similarly, Centurion Registrars’ suspension—enforced under Sections 38(4) and (5) of the ISA 2007—was attributed to similar compliance failures. The SEC directed affected clients to Africa Prudential Plc for portfolio transfers, while industry bodies, including the Nigerian Exchange Group (NGX), the Institute of Capital Market Registrars (ICMR), and the Chartered Institute of Stockbrokers (CIS), were instructed to cease all capital market-related engagements with both firms.
A Shift in Enforcement Strategy
This latest enforcement action underscores the SEC’s renewed vigilance in ensuring the integrity of Nigeria’s capital markets. In a notable policy shift, the Commission announced the introduction of a “name and shame” journal, in which violators of market regulations will be publicly identified in addition to facing prescribed penalties under the ISA 2007 and SEC regulations.
By taking decisive action against non-compliant firms, the SEC aims to reinforce investor confidence, promote transparency, and deter future infractions. The message is clear: the era of regulatory leniency is over, and market operators must adhere strictly to the rules or face the full force of the law.
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