NGX Moves to Curb Abuse, Tightens Sanctions on Third-Party Transactions

The Nigerian Exchange (NGX) has issued a stern directive prohibiting Trading License Holders from transferring the proceeds of clients’ securities sales or available balances to third parties under any circumstance.

In a circular to the investing community, the Exchange reminded market operators of their obligation to comply strictly with Rule 11:14 – Third-Party Transactions (Sales Proceeds and Transfer of Client Balance in the Name of Third Party) of the Rulebook of The Exchange, 2015 (Dealing Members’ Rules), as amended.

The NGX reiterated that: “Under no circumstance shall a Trading License Holder deliver the proceeds of sale of a client’s securities or transfer a portion or all of the client’s available balance to a third party.”

According to the directive, any Trading License Holder found in breach of this rule will face a minimum fine of N250,000 and/or suspension from trading on the Exchange for a period determined by the regulatory body.

The NGX emphasised that the rule aims to strengthen investor protection, ensure transparency, and maintain market integrity, warning that non-compliance will attract appropriate regulatory sanctions.

The Exchange also urged all Dealing Members to review their internal processes and client-handling procedures to align with the directive and avoid infractions.