Nigerian SEC issues Cease and Desist Order on fintech startup Crowdyvest

The Nigerian Securities and Exchange Commission (SEC) has announced that cooperative-driven fintech product, Crowdyvest Halal Fund, is an “unregistered entity purporting to operate as a corporative society” and has issued a cease and desist order.

This was disclosed in a statement by the commission earlier this week, stating that the Fund is not part of the list of authorized Halal Funds.

The statement reads “The attention of the Commission was drawn to the proposed launch of a Crowdyvest Halal Fund by Crowdyvest, an unregistered entity purporting to operate as a corporative society.

The Commission has since issued a Cease and Desist Order to Crowdyvest to stop the launch and operations of the Crowdyvest Halal Fund and any other investment activity which involves soliciting investments and deposits from the public.”

The SEC also enjoined Nigerians to confirm and verify the registration status of entities offering investment products with the commission, while for those offering savings products, they should verify with the central bank.

In the statement, the commission said a list of authorized Halal Funds and mutual funds can be found on its website.

According to the Commission, a Halal Fund is a form of Sukuk which refers to investment certificates or notes which evidence proportionate interest in ownership of tangible assets, usufruct, and services or investment in the assets of particular projects or special investment activity that adhere to the principles of Shariah.

Recently, we reported that the SEC released updated guidelines and rules concerning the operations of Crowd Funding activities in Nigeria.

In the notice, the commission mandates that anyone seeking to raise money via crowdfunding service will have to go through a Crowd Funding Intermediary (CFI).

The commission also limited the amount retail investors can invest in a crowdfunding transaction to just 10% of their net annual income in a year.

Nigerian SEC directs investment fintechs to register under new regulations or halt operations