Chaka was the first Fintech company to receive the SEC’s Digital Sub-Broker and Sub-Broker Serving Multiple Brokers through a digital platform license. Now Cowrywise has now obtained it’s own license as well from SEC as announced by it’s CEO/Co-founder, Razaq Ahmed.
He says – “Today, we are excited to announce the issuance of our SEC License in the fund/portfolio management category. We are the first fintech in Nigeria to get this license from the Securities and Exchange Commission. In this breakdown we’ll share.
But first, what is the SEC. This acronym stands for the Securities and Exchange Commission. And if we were to compare, it will be “the CBN” for investments. Just as the Central bank of Nigeria (CBN) regulates banks, the SEC is charged with the mandate of regulating the operations of investment companies. They work to ensure you are kept safe as an investor.
In 2017, when Cowrywise stepped into the wealth management space, there was no regulatory framework for fintech players. That is, no player had a license from the SEC (Securities and Exchange Commission) to serve the Nigerian people. However, this doesn’t mean it was illegal to operate. Rather, it was an evolutionary process as the regulator sought to understand things better. We started operations in partnership with regulated entities, Meristem Trustees Limited.
With no framework in place came a downside; the onus of securing investors fell more on service providers. For the investors, that meant exposure to various levels of risk. Despite the committed efforts of the regulator, first-time investors fell victims to a couple of pseudo-investment platforms.
How we Managed the Pre-regulation Era
From the get-go, we placed investment protection as our priority. In fact, we started off with a statement we still hold dear: “Trust is our currency“. For us, that meant we needed to do all we could to keep investors safe regardless of the absence of a documented structure. To do this, we mirrored the trustee structure of traditional firms.
- We pioneered the protection framework for customers of fintech (focused on wealth management) in Nigeria.
- Three hundred thousand people now use Cowrywise.
- Twenty-one of Nigeria’s total mutual funds is accessible on Cowrywise. We are the largest aggregator in Nigeria.
- We are the first fintech to be issued an SEC license in the fund/portfolio management category.
What does the SEC License mean?
Cowrywise Team: Tech bros in suits
This license does more than approve our existing framework. It empowers us to do more for both investors and providers in the space. Asides from investors getting further reassurance that they are on the right side of money, we will be building more immersive experiences for them.
On the fund managers side, we will not just broaden their reach to first-time investors, we will deepen our partnerships with many more.
Taking things a notch up, we will be making our APIs public to help fund managers across the world access our services and open up more investment options to serve our customers in Nigeria better. Digitizing the investment management infrastructure is an important next step in our vision to democratise access to investment products. These APIs do not just apply to fintechs; any company can embed investment features in their products as our investment API simplifies regulatory, compliance and technical hurdles. Hence, we are opening up early access to these APIs.”