Chaka has just been issued a license from Nigeria’s Securities and Exchange Commission (SEC) to operate its digital platform for trading stocks, several months after its regulatory issues with SEC.
On 19th December, 2020, SEC released a statement issued by the Investments and Securities Tribunal on its website restraining Chaka from stocks trading and all other activities.
In its statement, the Commission stated that the investment platform carried out activities which were outside the regulatory purview of the Commission and without requisite registration, as stipulated by the Investment and Securities Act 2007.
Chaka is an app-based investing and digital trading platform founded in 2019 by Tosin Osibodu.
Hosting over 4,000 different stocks from companies in Nigeria and the US, this startup provides users with different investment opportunities and options by its partnership with Citi Investment Capital Ltd, a Lagos-based broker licensed by the Securities and Exchange Commission (SEC), the regulating body that oversees capital markets in Nigeria.
Six months after the restraint from SEC, Chaka has become the first fintech company to acquire the digital sub-broker license introduced by SEC in April of this year, placing it directly under the Commission’s supervision.
As part of application, sub-brokers who utilize digital platforms to serve multiple brokers are required to meet the Commission’s Major Amendment Rules and Regulations which include a N50,000 application fee, N200,000 processing fee, N200,000 registration fee and N50,000 sponsored individual fee, totalling N500,000.
In addition, they must provide evidence of the required minimum start capital of N10,000,000 and a current Fidelity Insurance Bond covering at least 20% of the minimum paid-up capital
as stipulated by the Commission’s Rules and Regulations.