The Association of Securities Dealing Houses of Nigeria (ASHON) has raised concerns about banks bypassing licensed stockbrokers in the ongoing recapitalisation exercise. In a statement co-signed by ASHON’s Chairman, Sam Onukwue, and Secretary, Athan Ogbozor, the association accused banks of sidelining stockbrokers, instead empowering their own staff—including drivers and receptionists—to handle share subscription forms.
Recapitalisation, prompted by the Central Bank of Nigeria’s directive for banks to meet new capital requirements by 2026, has seen banks taking measures to mobilise funds. However, ASHON has criticised the banks for distributing shareholders’ registers to their employees, bypassing stockbroking firms, which are the registered receiving agents. These employees are reportedly issuing and collecting share subscription forms from investors, who would then return the completed forms directly to the banks or their subsidiaries.
ASHON further alleged that banks have created unapproved online portals to collect investors’ data, coercing them to link their accounts with the banks’ subsidiaries rather than with licensed stockbrokers. The association argued that these practices deviate from standard procedures, which involve stockbrokers as the primary agents for marketing shares and offering investment advice.
ASHON expressed concerns that these unconventional methods deprive investors of the opportunity to make informed investment decisions based on their objectives, risk tolerance, and other factors. They also warned of potential abuses similar to those during the 2005 bank recapitalisation, where stockbrokers were unjustly blamed for the banks’ infractions.
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The association urged issuers and investors to engage directly with licensed stockbrokers, who are regulated by the Securities and Exchange Commission and ASHON, to ensure they receive professional and sound investment advice.
