Section 171 Investments and Securities Act

Section 171 of the Investments and Securities Act 2025 is about Powers of the Commission after investigation. It is under Part XIII (Collective Investments Schemes) of the Act. It provides as follows:

(1) Where the Commission, after an investigation or inspection under section 170 of this Act, considers that the interests of the investors of a scheme or of members of the public so require, it may —

(a) direct a manager or a trustee or custodian to take any steps, or to refrain from performing or continuing to perform any act, in order to terminate or remedy any irregularity or undesirable practice or state of affairs disclosed
by an investigation or inspection;

(b) remove and replace any party in a manner as the Commission may deem appropriate, and where the manager is removed, the trustee or custodian shall in accordance with the Commission’s directives but subject to this Act arrange for another manager to take-over the administration of the collective investment scheme;

(c) require the trustee or manager to take steps, in accordance with the Commission’s directives for the winding-up of a scheme, and for the realisation of the assets and the distribution of the net proceeds, together with any income
accruals or other money available for distribution among the investors in proportion to their respective participatory interests; or

(d) in the case of a scheme being administered by a capital market operator in contravention of this Act, take steps in accordance with relevant provisions of the rules and regulations to have the scheme wound up.

(2) A person who refuses or fails to comply with any directive made under subsection (1) is liable to a penalty of not less than N5,000,000 and another N50,000 per day for every day the violation continues.