Their expulsion means that they cease to be Licensed Dealing Members (LDM) of the Exchange and are also precluded from executing trades on the market, providing advisory services to clients on capital market issues holding in lien or in trust clients’ accounts or their security holdings.
The decision of the GSE to expel the membership of LSL and FABL is in view of their violation of the market rules.
The GSE said First Atlantic Brokerage Limited is operating without an Authorised Dealing Officer for more than three months, contrary to Rule 6 (j) of the GSE Dealing Membership Rules. It also has low liquidity position meaning the financial status of the company shows a significant deterioration in its operations, resulting in successive negative returns which have eroded shareholders’ funds.
Rule 78 of the GSE Dealing Membership Rules requires a member of the Exchange to comply with the prevailing requirements of the Securities and Exchange Commission in respect of capital, liquidity, reports and returns.
FABL is therefore in breach of regulation 22 of the SEC Regulations, 2003 (L.I. 1728), which requires a Broker-Dealer to maintain at any given time, minimum liquid fund amounting to at least 20% of the aggregate indebtedness of the Broker-Dealer.
The firm is also inactive on the market due to the lack of an ADO to execute trades.
For Liberty Securities Limited, it is operating without an Authorised Dealing Officer for more than three months, contrary to Rule 6(j) of the GSE Dealing Membership Rules.
It also has low net shareholders’ fund balance and low liquidity position and also inactive on the market due to the lack of an ADO to execute trades.
The GSE however assured all existing clients of LSL and FABL that there are procedures for existing clients registered with both LDMs to transfer their security accounts and security holdings to any LDM of their choice.
A help desk or a correspondence officer will thus be communicated by each LDM to respond to clients’ issues.
