A bill aimed at regulating Ponzi investments and pyramid schemes in Nigeria by proposing a 10-year prison sentence for operators has passed its second reading in the House of Representatives.
The aforementioned bill also proposes increased regulatory powers for the Securities and Exchange Commission, as well as easier access to securities and facilities for state and local governments.
The bill’s sponsor, Babangida Ibrahim, Chairperson of the House Committee on Capital Markets, noted that the current law governing the Nigerian capital market, the Investments and Securities Act, Act No. 29 of 2007, was signed into law by late President Umar Musa Yar’adua in June 2007.
‘A Bill for an Act to Repeal the Investments and Securities Act, 2007 and Enact the Investments and Securities Bill to Establish Securities and Exchange Commission as the Apex Regulatory Authority for the Nigerian Capital Market as well as Regulation of the Market to Ensure Capital Formation, Market Protection to Ensure Capital Formation, Investor Protection, Maintain Fair, Efficient and Transparent Market and Reduction of Systematic Risk; a Bill for an Act to Repeal the Investments and Securities Act, 2007 and Enact the Investments
Ibrahim stated that current trends in capital market regulation, 14 years later, have necessitated major changes to the Act in order to align the Nigerian market with international standards.
According to the legislator, the bill would increase the number of sections in the ISA 2007 from 316 to 351.
According to Ibrahim, the bill outlaws Ponzi/pyramid schemes and other illegal investment schemes and imposes a minimum 10-year prison sentence on their promoters.
According to Brandspurng, the introduction of new provisions for regulating derivatives and commodities trading will help to deepen the Nigerian capital market and economy.