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Market regulator issues alert over unlicensed brokers

Discussion in 'International Forum' started by BAK, Aug 31, 2008.

  1. BAK

    BAK JF-Expert Member

    Aug 31, 2008
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    Market regulator issues alert over unlicensed brokers

    Trading at the Dar es Salaam Stock Exchange. Photo/FILE


    Sunday, August 31 2008 at 09:32

    As Tanzanians get down to buying shares of the National Microfinace Bank, the regulator — the Capital Markets and Securities Authority — has sent an alert over unlicensed brokers.

    According to the market regulator’s chief executive Dr Fratern M. Mboya, “the public should be cautious of advertisements inviting them to buy NMB shares through a company called C.V. Securities and an individual known as C.V.Okhal.

    “C.V. Securities is not licensed by CMSA to deal in securities market operations,” he warned.

    Dr Mboya told The EastAfrican that the alert followed recent advertisements by C.V. Securities on the Internet where it gave its telephone contacts.

    Dr Mboya said that although a registered broker had since contacted them to inform that C.V. Securities was acting on their behalf as an agent they told the broker to direct their agent to stop advertising their firm as a broker.

    “We have also instructed them to put that in writing or else we deal with the said agent legally,” said Dr Mboya.

    The government will dispose of 21 per cent out of the 51 per cent shares it has in the NMB.

    He said the warning still stands because early this year the CMSA arrested people that were purporting to be selling shares on behalf of CRDB Bank Ltd.

    Dr Mboya said that CMSA had also warned investors and the public to be cautious of advertisements and announcements asking them to sell or purchase shares of companies at negotiable prices.

    He said that the authority had seen a case where an individual had put out an advert seeking to buy orders from holders of CRDB shares with intent to sell.

    “An individual was taken to the police for further investigation and possible legal action,” said Dr Mboya.

    According to the Capital Markets and Securities Act 1994, as amended 1997, it is against the law and prohibited for any party(s) or person(s) to carry out the business of selling or buying of securities “unless that person has been granted a Dealers license by the Capital Markets and Securities Authority,” said Dr Mboya.

    He warned investors and the general public to avoid making investment decisions on the basis of such announcements.

    “In case of any doubts or in case of further clarification one can contact my office,” he said.

    Registered brokers include Core Securities Ltd, Tanzania Securities Ltd, Solomon Securities Company Ltd, Rasilimali Ltd, Orbit Securities Company Ltd and Vertex International Securities Ltd.

    The Capital Markets and Securities Authority was established to promote and regulate securities business in the country. It was established under Capital Markets and Securities Act, 1994.

    The law for regulating the securities industry is the Capital Markets and Securities Act, 1994 (Act No. 5 of 1994 as amended by Act No. 4 of 1997.

    Its mission is to design and implement measures to enable the creation and development of sustainable capital markets that are efficient, transparent, orderly, fair and equitable to all.