NASD urges compliance with SEC rules

The NASD OTC Exchange has called on public limited companies to comply with the Securities and Exchange Commission rule mandating that securities of unlisted public companies be traded exclusively on SEC-registered Over-the-Counter exchanges.

In a statement made available to our correspondent on Sunday, the NASD emphasised that this regulation prohibits the purchase, sale, or transfer of unlisted securities through bilateral agreements outside of a registered stock exchange, ensuring transparency and investor protection.

The rule, as stated by the SEC, stated that “all securities of unlisted public companies shall be bought, sold, or transferred only by means of a system approved by the Commission and under such terms and conditions as the Commission may prescribe from time to time.”

The SEC further warns that violators, including unlisted public companies, directors, registrars, brokers, or dealers, risk penalties starting at N100,000 and up to N5,000 for each day of default.

The NASD noted that non-compliance undermines the SEC’s ability to monitor these companies, stating, “If the rule is enforced by the Commission, it will make the securities of unlisted public companies more accessible to investors and other market participants on a trusted platform. This will enhance liquidity, minimize underhand dealings, curb fraudulent transactions, and boost investor confidence.”

The NASD reiterated that adhering to the SEC rule ensures transparency, provides opportunities for price discovery, and promotes portfolio diversification through access to securities across various economic sectors.

The PUNCH reported that Nigeria’s only licensed Over-The-Counter Exchange, NASD OTC has commenced the diversification of its operations in order to enhance its competitive edge, attract more customers, boost revenue and deliver shareholder value.