Section 240 Investments and Securities Act

Section 240 of the Investments and Securities Act 2025 is about Registration of warehouses. It is under Part XV (Commodities Exchange and Warehouse Receipts) of the Act. It provides as follows:

(1) A person shall not operate a warehouse storing commodities linked to an exchange or issuing warehouse receipts tradable on an exchange without registration of the warehouse by the Commission.

(2) The Commission may, upon application in the prescribed form, register a warehouse operator for the operation of a warehouse in accordance with the provisions of this Act.

(3) The registration under subsection (2), shall be granted subject to the Commission satisfying itself that the warehouse —
(a) is suitable for the proper storage of the particular commodities;
(b) operator meets the conditions for eligibility to operate a registered warehouse of the kind applied for as may be prescribed in the rules and regulations made under this Act; and
(c) operator agrees, as a condition to the granting of the registration, to comply with and abide by the provisions of regulations made under this Act.

(4) A person, who operates a registrable warehouse without obtaining registration as required under this Act, commits an offence and is liable on conviction to a fine of not less than N3,000,000 or imprisonment for a term of not less than five years or both.

(5) A person who continues to operate a warehouse after the suspension or revocation of its instrument of registration, commits an offence and is liable on conviction to a fine of N2,000,000 or imprisonment for a term of not less
than five years or both.

(6) The Commission may, in lieu of criminal prosecution under subsections (4) and (5), impose a penalty of not less than N10,000,000 and a further sum of N50,000 for every day the violation continues.