ABUJA, Nigeria (VOICE OF NAIJA)- The NASD OTC Exchange has urged public limited companies to adhere to the Securities and Exchange Commission’s regulation, which mandates that the securities of unlisted public companies be traded solely on SEC-registered Over-the-Counter exchanges.
According to a Statement, NASD stressed that this rule prohibits the buying, selling, or transfer of unlisted securities through bilateral agreements outside of a registered stock exchange, ensuring greater transparency and protection for investors.
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.”
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The SEC has also cautioned that violators such as unlisted public companies, directors, registrars, brokers, or dealers—could face penalties ranging from N100,000 to N5,000 for each day of non-compliance.
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 emphasized that compliance with the SEC rule promotes transparency, facilitates price discovery, and supports portfolio diversification by providing access to securities across different economic sectors.
NASD OTC, Nigeria’s sole licensed Over-The-Counter Exchange, has begun diversifying its operations to strengthen its competitive position, attract more customers, increase revenue, and enhance shareholder value.