Stanbic IBTC Fined ₦50M for Unapproved Digital Offering
Stanbic IBTC Capital Limited has been fined ₦50.145 million ($34,490) by Nigeria's Securities and Exchange Commission for using digital distribution channels without approval during Guaranty Trust Holding Company Plc's public offer. The fine, related to a ₦392.49 billion ($269.71 million) capital raise, serves as a reminder of the importance of regulatory compliance in Nigeria's capital markets.
Stanbic IBTC Capital Limited, the lead issuing house for Guaranty Trust Holding Company Plc's public offer, initially reported a much higher fine of ₦50.15 billion ($34.49 million) in NGX filings. This was later clarified as a clerical error. The investment bank used digital platforms to attract retail investors, a practice that requires prior approval from the Securities and Exchange Commission (SEC) to ensure investor protection, market integrity, and transparency.
Digital platforms are designed to enhance the efficiency of public offering subscriptions and rights issue processes, opening them up to retail investors. However, failure to receive approval can result in heavy fines, licence suspension, or licence withdrawal. The penalty imposed on Stanbic IBTC Capital Limited is seen as a deterrent to non-compliant practices. Despite this, market operators assure that the penalty will not derail the digitalisation drive in Nigeria's capital markets. In 2021, over 150,000 new retail investors participated in Nigeria's first digital public offer involving MTN, demonstrating the potential of digital platforms in expanding investment opportunities.
The fine imposed on Stanbic IBTC Capital Limited underscores the importance of regulatory compliance in Nigeria's capital markets. While digital platforms offer significant benefits, their use must be approved and monitored by the SEC to protect investors and maintain market integrity. Despite this setback, Nigeria's digitalisation drive in capital markets continues to show promise, as evidenced by the growing number of retail investors participating in digital public offers.
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