Regulatory Actions Against Nigerian Stockbrokers: A 13-Year Overview

Over a 13-year period, the Nigerian Exchange Group (NGX), through its regulatory subsidiary, NGX Regulation Limited (NGX Regco), issued approximately 3,792 regulatory actions against trading licence holders.

This is in line with findings from a recent study by BrokerTraX, which monitors compliance among trading licence holders. The study reveals that between 2011 and 2023, stockbroking companies accounted for 193 regulation violations out of the total recorded.

The goal of these enforcement actions is to bolster investor confidence in the market.

In 2011, NGX Regco carried out 257 enforcement proceedings against stockbroking companies. The number rose to 436 in 2012 before slightly declining to 424 in 2013.

From 2014 onward, the data showed varying levels of enforcement:

• 2014: 557 actions
• 2015: 608 actions
• 2016: 328 actions

In subsequent years, the numbers fluctuated as follows:

• 2017: 267
• 2018: 171
• 2019: 167
• 2020: 82 (reduced due to COVID-19 concessions)
• 2021: 148
• 2022: 139

In 2023 alone, 208 enforcement proceedings were recorded as part of the 3,792 cumulative sanctions.

Between January 2012 and November 25, 2024, no fewer than 37 stockbroking firms were implicated in unauthorized sales of investors' shares and misappropriation of funds, according to the report.

The NGX noted that the reduction in enforcement actions in 2020 was due to concessions granted to trading licence holders to mitigate the adverse effects of the COVID-19 pandemic.

On a positive note, the majority of complaints regarding the misuse of investor funds and unauthorized share sales have been resolved, reimbursed, or remain under consideration through the Investors' Protection Fund (IPF).