In a bid to maintain the integrity of the capital market and further protect investors, the Ni­gerian Stock Exchange (NSE) has said it will sever links with dealing member firms that are inactive for six consecutive months.
The intention is being pursue through a Securi­ties and Exchange Com­mission (SEC) approved rule that authorizes the NSE to revoke the dealing licences of such inactive firms.
The SEC approved rule provides that where a dealing member firm is inactive for six consecu­tive months, the Exchange shall revoke its licence. The circumstances of the inactivity are further cate­gorised into voluntary and involuntary inactivity.
Ms. Tinuade Awe, the NSE Head of Legal and Regulation Division, ex­plained that voluntary in­activity occurs where the dealing member firm has not engaged in any trading activity for consecutive six months without being sus­pended by the NSE or the SEC.
The rule provides fur­ther that the Exchange shall forthwith revoke the licence of any dealing member firm that falls into this category.
Involuntary inactivity, according to her, occurs where a dealing member firm has been suspended from trading activities by the Exchange or the SEC by reason of infraction committed by that dealing member firm and it has not carried out any trad­ing activity within the stip­ulated six months period.
Awe noted that “The powers of the Exchange under this SEC approved Rule will be exercised ju­diciously and will take into account all the circum­stances surrounding each individual case as well as the interests of all stake­holders, particularly the investors”.
She observed that the majority of the prohibited practices in the market have been linked to inac­tive firms and so it is im­portant to stress that the new rule is aimed at fur­ther sanitizing the market to protect investors.  The Head of Broker Dealer Regulation NSE, Mr. Olufemi Shobanjo, in his own contribution said that the NSE in exercise of its regulatory author­ity over dealing member firms shall continue to use the utmost care and dili­gence.
He noted that the Ex­change was keen to en­trench the required cata­lysts to stimulate and build a healthy and well regulated market so as to stimulate increasing levels of investor confidence in the market.

NSE to revoke licences of inactive dealing member firms