SEC issues Cease and Desist Order on Crowdyvest Halal Fund operations

The SEC has announced that cooperative-driven fintech product, Crowdyvest Halal Fund, is an unregistered entity.

The Securities and Exchange Commission (SEC) has announced that cooperative-driven fintech product, Crowdyvest Halal Fund, is an “unregistered entity purporting to operate as a corporative society” and has issued a cease and desist order.

The SEC disclosed this in a statement earlier this week, citing that the Fund is not part of the list of authorized Halal Funds.

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What the SEC is saying

The statement from SEC reads in part:

“The attention of the Commission was drawn to the proposed launch of a Crowdyvest Halal Fund by Crowdyvest, an unregistered entity purporting to operate as a corporative society.

The Commission has since issued a Cease and Desist Order to Crowdyvest to stop the launch and operations of the Crowdyvest Halal Fund and any other investment activity which involves soliciting investments and deposits from the public.”

The SEC alerted Nigerians to confirm and verify the registration status of entities offering investment products with the Commission and entities offering savings products with the Central Bank of Nigeria.

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What you need to know about SEC guidelines on crowdfunding

The SEC recently issued updated guidelines and rules governing the operation of Crowd Funding activities in Nigeria, ordering that anyone seeking to raise money through a crowdfunding service will have to go through a Crowd Funding Intermediary (CFI). The commission also limited the amount retail investors can invest in a crowdfunding transaction to just 10% of their net annual income in a year.

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According to the Commission, a Halal Fund is a form of Sukuk which refers to investment certificates or notes which evidence proportionate interest in ownership of tangible assets, usufructs and services or investment in the assets of particular projects or special investment activity that adhere to the principles of Shariah.