RECAPITALISATION: ASHON ACCUSES BANKS OF SIDELINING STOCKBROKERS
Main Points:
1. Accusation by ASHON: The Association of Securities Dealing Houses of Nigeria (ASHON) has accused banks of bypassing licensed stockbrokers during the ongoing recapitalisation exercise.
2. Issue with Banks: Banks are allegedly empowering their staff, including drivers and receptionists, to handle share subscription forms instead of using stockbrokers, who are typically the registered receiving agents.
3. Background of Recapitalisation: Banks are undergoing a recapitalisation process as directed by the Central Bank of Nigeria to meet new capital thresholds. This process is expected to continue until 2026.
4. ASHON's Concern: ASHON claims that some banks are sidestepping stockbrokers by having their staff manage share subscriptions and using unapproved portals to gather investor information. This practice limits fair marketing opportunities for stockbrokers.
5. Stockbrokers' Role: Stockbrokers are supposed to market shares, offer investment advice, and assist investors with their subscriptions. The current practices are seen as undermining their role.
6. Implications for Investors: The association warns that these unorthodox channels could lead to poor investment decisions and potential abuse of the process, similar to issues during the 2005 bank recapitalisation.
7. Advice from ASHON: ASHON recommends that issuers and investors deal directly with ASHON members for professional advice and ensure they are working with properly registered and regulated firms.
Main Points:
1. Accusation by ASHON: The Association of Securities Dealing Houses of Nigeria (ASHON) has accused banks of bypassing licensed stockbrokers during the ongoing recapitalisation exercise.
2. Issue with Banks: Banks are allegedly empowering their staff, including drivers and receptionists, to handle share subscription forms instead of using stockbrokers, who are typically the registered receiving agents.
3. Background of Recapitalisation: Banks are undergoing a recapitalisation process as directed by the Central Bank of Nigeria to meet new capital thresholds. This process is expected to continue until 2026.
4. ASHON's Concern: ASHON claims that some banks are sidestepping stockbrokers by having their staff manage share subscriptions and using unapproved portals to gather investor information. This practice limits fair marketing opportunities for stockbrokers.
5. Stockbrokers' Role: Stockbrokers are supposed to market shares, offer investment advice, and assist investors with their subscriptions. The current practices are seen as undermining their role.
6. Implications for Investors: The association warns that these unorthodox channels could lead to poor investment decisions and potential abuse of the process, similar to issues during the 2005 bank recapitalisation.
7. Advice from ASHON: ASHON recommends that issuers and investors deal directly with ASHON members for professional advice and ensure they are working with properly registered and regulated firms.