Section 39: Accounts to be kept by capital market operator

(1) A capital market operator shall keep or cause to be kept such accounting and other records:
(a) as shall sufficiently show and explain the transactions and financial position of his business and enable true and fair profit and loss accounts and balance sheets to be prepared, regularly; and
(b) in a manner that will enable them to be conveniently and properly audited.
(2) A capital market operator shall be deemed not to have complied with subsection (1) of this section in relation to records unless the accounting and other records of the capital market operator :
(a) are kept in sufficient detail to show particulars of:
(i) all monies received or paid by the capital market operator, including monies paid to or disbursed from a trust account,
(ii) all purchases and sales of securities made by the capital market operator, the charges and credits arising from them, and the names of the buyers and sellers, respectively of each of those securities,
(iii) all income received from commissions, interest, and other sources, and all expenses, commissions, and interest paid by the capital market operator,
(iv) all the assets and liabilities (including contingent liabilities) of the capital market operator,
(v) all securities which are the property of the capital market operator showing by whom the securities or the documents of title to the securities are held and, where they are held by some other person, whether or not they are held as securities against loans or advances,
(vi) all securities that are not the property of the capital market operator and for which the dealer or any nominee controlled by the security dealer is accountable, showing by whom, and for whom, the securities or the documents of title to the securities are held and the extent to which they are either held for safe custody or deposited with a third party as securities for loans or advances made to the capital market operator,
(vii) all purchases and sales of options made by the capital market operator and all fees (being options monies) arising from them,
(viii) all arbitrage transactions entered into by the capital market operator; and
(ix) all underwriting transactions entered into by the capital market operator.
(b) are kept in sufficient detail to show particulars of every transaction by the capital market operator;
(c) specify the day on which or the period during which each transaction by the capital market operator took place; and
(d) contain copies of acknowledgements of the receipt of securities or of documents of title to securities received by the capital market operator from clients for sale or safe custody clearly showing the name or names in which the particular securities are registered.
(3) Without prejudice to subsection (2) of this section, a capital market operator shall keep records in sufficient detail to show particulars of all transactions by the capital market operator with or for the account of:
(a) clients of the capital market operator;
(b) the capital market operator himself; and
(c) employees of the capital market operator.
(4) A capital market operator 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 N500,000 or to a term of imprisonment of not less than one year or to both such fine and imprisonment.
(5) The Commission may, in lieu of prosecution for the offence prescribed in subsection (4) of this section, sanction a capital market operator who violates the provisions of this section by imposing a penalty of not less than N500,000 and a further sum of not less than N5,000 for every day in which the violation continues.