Section 119 Investments and Securities Act

Section 119 of the Investments and Securities Act 2025 is about Allotment of securities and dealing on securities exchange. It is under Part IX (Regulation of Securities) of the Act. It provides as follows:

(1) Where a prospectus, whether issued generally or not, states that application has been or will be made for permission for the securities offered by it to be dealt with on any securities exchange, any allotment made on an application under the prospectus shall, whenever made, be void if the permission has —

(a) not been applied for within three days after the issuance of the prospectus; or
(b) been refused before the expiration of the offer period or such longer
period as may be notified to the applicant by the securities exchange.

(2) Where application or permission for a dealing referred to in subsection
(1) has not been made or applied for or if made or applied for has been refused, the issuer or sponsor shall repay, with accrued interest, money received from applicants under the prospectus, and if the money is not repaid within a period
stipulated by the Commission, the issuer or sponsor and its directors shall be jointly and severally liable to repay the money with interest at the current interbank rate per annum from the expiration of the period stipulated by the Commission.

(3) All money received by virtue of this section shall be kept in a separate trust account on such terms and conditions as may be prescribed by the Commission, and the issuing house shall be liable to repay the money specified under subsection (2).

(4) The issuing house and any of its officers, who violates the provisions of subsection (2) shall be jointly and severally liable to a penalty of not less than
N5,000,000 and a further sum of not less than N50,000 for every day the violation continues.

(5) Any condition requiring or binding any applicant for securities to waive compliance with any requirement of this section is void.

(6) For the purposes of this section, permission shall not be deemed to be refused if the applicant is notified that the application shall be given further consideration by the Commission.

(7) This section shall have effect in relation to —
(a) any securities agreed to be taken by a person underwriting an offer by a prospectus as if he had applied for them under the prospectus; and

(b) a prospectus offering securities for sale, with the following modifications —
(i) references to sale shall be substituted for references to allotment,
(ii) the persons by whom the offer is made shall be liable under subsection (2) to repay money received from applicants, and references to the issuer’s liability under that subsection shall be construed accordingly, and
(iii) for the references in subsection (3) to the issuer and every officer of the issuer who is in default there shall be substituted references to any person by or through whom the offer is made and who authorises or permits the default.