Kelechukwu Mgboji 
The NASD OTC Exchange has urged public limited companies (PLCs) to adhere to the Securities and Exchange Commission (SEC) mandate requiring the trading of unlisted securities exclusively on SEC-registered Over-theCounter (OTC) platforms.
This directive, aimed at bolstering transparency and curbing illicit transactions, prohibits bilateral dealings outside regulated exchanges.
Under the SEC rule, securities of public companies must be registered immediately upon issuance and traded solely on approved platforms.
Noncompliance exposes entities—including companies, directors, and brokers—to penalties ranging from an initial fine of N100,000 to daily surcharges of up to N5,000, as stipulated by the Investment and Securities Act (ISA).
The rule explicitly states: “All securities of unlisted public companies shall be bought, sold, or transferred only through systems approved by the Commission, under terms and conditions prescribed by it.” By enforcing this regulation, the SEC aims to foster accountability, investor protection, and market integrity.
A statement from NASD reveals that numerous unlisted securities currently elude SEC oversight due to trading outside regulated platforms, undermining investor safeguards.
The NASD emphasised that strict enforcement of the rule would democratize access to unlisted securities, enhancing their visibility and liquidity for issuers while facilitating fair price discovery.
The NASD highlighted that regulated OTC platforms minimize insider dealings, curb fraudulent practices, and bolster investor confidence.
Furthermore, they provide mechanisms for portfolio diversification and efficient market access across various sectors, creating a level playing field for all stakeholders.
By mandating compliance, the SEC seeks to strengthen Nigeria’s capital markets, ensuring that transactions in unlisted securities are conducted transparently, securely, and efficiently, thus advancing the nation’s broader economic objectives.
Meanwhile, the NASD Securities Index (NSI) ended Friday in negative territory, slipping 0.33 per cent to close at 3,016.66 points. This marked a reversal from Thursday’s 0.67 per cent gain.
Trading activity saw a sharp drop, with total volume traded plunging 85.28 per cent to 433,854 units. These trades were valued at N876,364.63, executed across 15 deals. Despite the bearish close, the NASD OTC market registered two gainers at the end of the session.
