Capital Market

Nigerian investment-tech startup, Chaka, secures SEC’s first digital stock trading licence

June 23, 2021 · 3 min read
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Nigeria’s Securities and Exchange Commission (SEC) has issued a new license for digital stock trading to Chaka technologies limited. 

The commission’s Sub-Broker Serving Multiple Brokers Through a Digital Platform License will enable Chaka to offer stocks directly to Nigerian investors. The licence also lets the company work with multiple stockbrokers and help digitise their services. 

Founded in 2019, the Chaka offers over 4000 stocks from the US, the UK, China, and Nigeria. Along with players like Bamboo, Trove and Risevest, the investment-tech space has been gradually expanding. 

While Chaka did not have a stockbroking licence at the time, it struck a partnership with Citi Investment Capital Limited for Nigerian stocks and DriveWealth LLC for its foreign stock offerings.

Per its legal page, the startup did not manage investor funds itself, as that was the purview of licenced brokers; it simply served as a digital outlet that brings the capital market to a wider audience. 

However, in December 2020, Chaka received a surprise as SEC issued a court order that effectively restricted it from offering stocks to the investing public. 

In April 2021, the regulator followed this up by warning investment-tech platforms to desist from offering US stocks to Nigerians. 

A changing structure?

Tosin Osibodu, CEO, Chaka

Tosin Osibodu, CEO of Chaka, reveals that the company has been actively engaging SEC since the circular was first released in December 2020. 

Osibodu reveals that the new digital sub-broker licence would change its investment operations structure as it would no longer need to operate through a broker. 

“We now have direct oversight from SEC. So the customer is aware that all the funds and his entire account are supervised directly by the SEC,” he reveals. 

Though SEC has not published a specific regulatory framework for the Digital Sub-broker licence, an April 2021 amendment to the SEC rule indicates that the regulator now fully recognises the presence of investment-tech platforms. 

According to SEC, the ‘’Sub-broker Serving Multiple Brokers Through a Digital Platform’’ uses a digital platform to serve clients and interact with the sponsoring broker or brokers.

Per Osibodu, Chaka can now help regular stockbrokers digitise their services. 

This new licence category requires a  $24,300 (₦10 million) paid-up capital requirement, a Fidelity bond covering 20% of the paid-up capital, and four application fees that cumulatively cost $1200 (₦500k).

While Osibodu does not confirm if this licence addresses SEC’s warning against offering foreign stocks, he affirms that it will be business as usual for its customers. Osibodu’s affirmation implies that the company would continue offering both local and foreign shares to investors.

Nigeria’s vast and diverse fintech space is replete with sub-sectors that either have defined or undefined regulations. But that appears to be changing.

Per its recent circular, the commission wants fintech companies without defined regulations to undergo an incubation program from Q3 2021.

Though SEC has not issued an official framework on the new sub-broker licence, other industry players would likely follow suit. Meanwhile, the regulator might be coming up with more defined regulations that would, in its words, “Promote innovation, and bring more people into the Nigerian Capital market.”

As we’ve examined previously, it would take a lot more than technology to boost Nigeria’s capital market, and any regulatory reform that promotes this would be a welcome initiative.

Emmanuel Paul

Emmanuel Paul


Writer and Narrator.  Tech, business and policy analysis is my daily bread. Looking to chat? Catch up with me, @eruskkii, on Twitter or send a mail to

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