Sub-Broker (Digital) Registration Requirements

APPLICATION GUIDELINES

• All the documents listed below are mandatory requirements, which must be provided.
• Every SEC Form must be duly completed and adequately populated with all the required information ensuring that no field is left blank, as this will invalidate the forms.
• An application is not considered submitted until the forms are adequately populated and all the required documents provided
• Sponsored individuals whose registration have lapsed are required to commence the registration process afresh. (refer to the SEC Rules 19 and 35 as amended)
• Proposed sponsored individuals are required to visit any of the SEC offices with three (3) recent passport photographs to commence the Police clearance process (this for potential sponsored individuals seeking registration for the first time with the Commission and those whose registration as sponsored individuals have lapsed);
• All potential sponsored individuals (Except individuals for transfer) will be required to attend a pre-registration training and examination. Successful individuals, (provided the required structure of sponsored individuals is maintained) will be presented before the Registration Interview Committee for consideration.
• ALL original copies of the documents/certificates are to be presented for sighting by an authorized officer of the SEC.
• Annual renewal of registration: Upon the approval to operate as a Capital Market Operators (CMO), the company shall renew its registration annually not later than January 31st of every year
• The Commission may require such other documents and/or information as it considers necessary for registration.
• Every applicant Company/Firm will be physically inspected in the course of processing an application for registration,
• A fair knowledge of the Rules and Regulations of the Commission and Investments & Securities Act No 29 of 2007 and the Capital Market is an essential prerequisite for registration

REGISTRATION REQUIREMENTS

Payment

1. Evidence of Payment of Filing/Application Fee – N100,000.00 (One Hundred Thousand Naira);
2. Evidence of Payment of Processing Fee – N300,000.00 (Three Hundred Thousand Naira);
3. Evidence of Payment of Registration Fee – N1,000,000.00 (One Million Naira);
4. Evidence of payment of Director’s fee- N100,000.00 (One Hundred Thousand Naira)
5. Evidence of Payment of Sponsored Individual fees as applicable as follows;

• N100,000.00 (One Hundred Thousand Naira) only for each potential sponsored individual
• N50,000.00 (fifty thousand naira) for transferring sponsored individual
• N100,000.00 (One Hundred Thousand Naira) only for change of registration
• N150,000.00 (One Hundred Thousand and fifty thousand Naira) for transfer and change of status

Forms

1. Duly Executed Forms SEC 2C and 3 – For the Company
2. Duly Executed Forms SEC 2 and 2D – to be duly completed by the Sponsored Individuals and the Directors of the Company
3. Duly Executed Form SEC 2B for Transferring Individuals. (Please refer to the requirements for transfer of registration on the Commission’s website for compliance).

Directors and Proposed Sponsored Individuals

1. Minimum of three (3) sponsored Individuals, including the Managing Director. No compliance officer is required for the sub-broker, as the Compliance Officer of the Sponsoring firm shall provide oversight on sub-brokers registered under the sponsor. (Companies registered/seeking registration to carry out multiple functions shall sponsor the total number of individuals prescribed for each function)
2. The Form SEC 2 should indicate amongst others, the applicant’s BVN, bank account details, official email address(es) as well as full postal addresses, contact numbers and email addresses of previous employers, bankers and nominated referees;
3. Copies of employment letters and schedule of duties (duly signed by both parties i.e. the employer and the employee);
4. For individuals on transfer, provide evidence of resignation from the previously registered company, evidence of the individual’s notification to the Commission of his/her resignation and the company’s acceptance of the resignation;
5. Curriculum vitae of all Directors and proposed sponsored individuals, which shall include details of activities, arranged in a chronological order from Secondary School(s) with dates and duration clearly indicated. (Reasons for leaving all previous employment are required to be stated). The duration and gaps in employment and educational history must be indicated and explained;
6. Copies of credentials including secondary school(s) and NYSC discharge/exemption certificates (originals are required to be sighted by an authorized SEC staff);
7. Evidence of change of name where applicable (to be supported with relevant documents including Court Affidavit and Newspaper publication)
8. A copy of valid means Identification (International Passport, National Identity Card, Driver’s License, permanent voter’s card, Tax Clearance Certificate or utility payment documents)
9. A copy of residence/Working Permit (for Non-Nigerians/residents). The original copy will be required for sighting by the SEC official

All Sponsored Individuals are required to have relevant post-graduation experience as stipulated in ‘Rule 20’ of the Commission`s Rules and Regulations

Minimum Paid-Up Capital and Fidelity Insurance Bond

1. Evidence of Required Minimum Paid up Capital of N10,000,000.00 (Ten Million Naira) (i.e. Bank balances, fixed asset or Investment in quoted Securities);
2. No sub-broker shall permit its aggregate indebtedness to exceed 10 times its net capital unimpaired by losses
3. Valid Fidelity Bond covering at least 20% of the minimum paid-up capital with an end date of December 31.

Applicant Company

1. Profile of the Company should include among others brief history of the company, organizational and shareholding structure, principal officers as well as details of past and current activities;
2. The name(s) and address(es) of the company’s subsidiaries/associated/ companies, type of business and percentage holding;
3. Evidence of Payment of shares allotted to the shareholders;
4. Evidence copy of the agreement signed between the sponsoring broker/dealer company and Sub-Broker
5. letter of recommendation and undertaking signed by the sponsoring Broker/Dealer on behalf of the Sub-Broker
6. Evidence copy of securities owned by such broker or dealer or in which the broker or dealer has an interest shall be listed in a separate schedule and valued at the current market price;
7. Operational manual of the company;
8. Business plan of the company
9. Organizational Chart of the company
10. Provide information on all the Banks operated by the company from inception, including the statement of accounts operated by the Company for the last six (6) months as at time of filing with the Commission.
11. Provide the company’s website address, email address (es), phone number(s) and shall also provide social media handles (e.g. Facebook, Instagram, LinkedIn; X; etc.);

Corporate Documents

A copy each of the following, duly certified by the CAC;

1. A copy of the certificate of incorporation certified by the Corporate Affairs Commission (CAC). Where a copy not certified is filed, the applicant shall present the original copy for sighting by an authorized officer of the Commission
2. Memorandum and Articles of Association – this should include the power to perform the specified function;
3. CAC document(s) showing Statement of Share Capital, Return of Allotment, and Particulars of Directors (the original certificate is to be presented for sighting by an authorized officer of the SEC);
4. Latest audited accounts or statement of affairs for companies in operation for less than one year, signed by two company directors and not more than three (3) months old at the time of filing with the Commission. The statement of affairs must be confirmed with an attestation letter by an external auditor. (the cash assets mix ratio shall be 60% liquid assets and 40% fixed and other assets);
5. Sworn statement of guarantee from the sponsoring Broker/Dealer including an undertaking by the sponsoring Broker/Dealer on behalf of the Sub-Broker;
6. A sworn undertaking, confirming to the Commission that all the information provided by the Company including all Bank information is true and correct. (to be signed by a Director or company secretary and notarized);
7. Sworn undertaking to keep proper records and render returns as may be specified by the Commission from time to time signed by a director or the company secretary (to be notarized);
8. Sworn undertaking to abide by SEC Rules and Regulations and Investments and Securities Act No.29 of 2007 by a director or the company secretary (to be notarized);
9. Copy of “multiple principal agreement” with every sponsoring broker.
10. Description of the Technology on which its infrastructure is built:
11. Structure
12. Capability/limitation
13. Security
14. back-up & recovery process
15. Certification that the Infrastructure is sufficient to perform the required function by an IT Service Provider registered by NITDA or other recognized Agency, and endorsed by a representative of the Association of Securities Exchanges
16. Evidence of documented policies and procedures for managing technology risks.
17. Electronic Communication channel, through which all communications with clients would be made.
18. Method of establishing the suitability of potential clients to utilize its infrastructure for transactions.
19. Notice to potential clients of the features, risks, responsibilities, obligations and liabilities associated with the use of its infrastructure.
20. Before execution of an order, proof that the Client is fully aware of and understands the risks associated with the service being offered.
21. Confirmation that it would not delegate its functions to another sub-broker without the written permission of the Commission
22. Adequate KYC requirements
23. Binding Legal Agreement with Potential clients taking into consideration the following amongst others:
24. the respective rights and liabilities of the parties
25. Provisions relating to the security (physical and IT security) of the infrastructure (user identity, passwords, authentication codes, etc.), to avoid unauthorized system access;
26. Limits that are expressed as a notional amount for each Customer above which the orders cannot be placed
27. Warranties, indemnities, charges and Customer/product specific conventions;
28. Conditions (such as for entering orders, error trade policies, etc.) and restrictions such as the right to suspend the service, to reject or cancel orders, etc.
29. A requirement to have knowledge of trading rules and applicable laws and regulations; and
30. A requirement that the Customer or his/her personnel who manage the process are authorized, qualified and competent.