Section 101: Dealing as principal

(1) A securities dealer shall not as a principal deal in any securities with a person who is not a securities dealer unless that other securities dealer is acting in the transaction as principal and not as agent.
(2) A reference in this section to a securities dealer dealing or entering into a transaction as principal includes a reference to a person:
(a) dealing or entering into a transaction on behalf of a person associated with him;
(b) dealing in securities on behalf of a body corporate in which he has a controlling interest; or
(c) where he carries on business as a dealer for a body corporate in which his interest and the interests of his directors together constitute a controlling interest.
(3) A securities dealer who, as a principal, enters into a transaction of sale or purchase of securities with a person who is not a securities dealer shall state in the contract note that he is acting in the transaction as principal and not as agent.
(4) The provisions of subsection (1) of this section shall not apply in relation to a transaction entered into by a dealer who is a member of a securities exchange or capital trade point and specialises in transactions relating to odd lots of securities being a transaction of sale or purchase of an odd lot of securities.
(5) Where a securities dealer fails to comply with subsection (1) or (3) of this section in respect of a contract for sale of securities by him, the purchaser of the securities may, if he has not disposed of them, rescind the contract by a notice of rescission in writing given to the securities dealer not later than 30 days after the receipt of the contract note.
(6) Where a dealer fails to comply with subsection (1) or (3) of this section in respect of a contract for the purchase of securities by him, the vendor of the securities may, in like manner, rescind the contract.
(7) Nothing in subsections (5) and (6) of this section shall affect any right which a person has apart from the provisions of these subsections.
(8) A person who contravenes or fails to comply with any of the provisions of this section commits an offence and is liable on conviction to a fine of not less than N20,000 or to imprisonment for a term not exceeding six months or to both such fine and imprisonment.