SEC sets June 30 deadline for registration of crowdfunding platforms

The Securities and Exchange Commission (SEC) has directed all existing investment crowdfunding portals and digital commodities platforms to comply with its new registration requirements or cease operations by June 30, 2021.

The regulatory body announced this in a statement released on Wednesday.

Crowdfunding involves the use of small amounts of money, obtained from a large number of individuals or organisations, to fund a project or a business through an online web-based platform.

According to SEC, the rules governing crowdfunding business in Nigeria came into effect on January 21, 2021, as part of its efforts to ensure investor protection while encouraging innovation in the conduct of securities business.

“In line with the transitional provisions of the Rules, all persons/entities operating an investment crowdfunding portal/digital commodities investment platform prior to the commencement of the rules were expected to restructure all operations in accordance with the requirements of the rules and apply for registration not later than 90 days from the Effective Date,” the statement read.

“While the transitional period elapsed on the 21st day of April, 2021, the Commission hereby directs all existing investment crowdfunding portals/digital commodities investment platforms to note the requirements and eligibility criteria for raising funds through and/or operating a Crowdfunding Portal and comply with the registration requirements or cease operations by the 30th of June, 2021, failing which the operations of such platform would be categorized as illegal and attract regulatory sanction as stipulated in the Rules.”