‘Innovation, regulation key to financial technology development’

Chaka is the first and only stock trading platform to be licensed by the Securities and Exchange Commission (SEC), it is the go-to digital investment platform for African businesses and individuals founded to give every African access to institutional-level investment and wealth management opportunities. Tosin Osibodu is the brainbox behind the innovation. And with it, he is pushing the frontiers to ensure that Africa, especially Nigeria, is not relegated in financial technology development.

Osibodu is a systems engineer and a member of the Chartered Institute of Stockbrokers (CIS), while his co-founder, Bolanle Osibodu has over the last decade, been a Wealth Manager and Portfolio Specialist at Barclays, and The Hongkong and Shanghai Banking Corporation Limited (HSBC), offering globally diversified investment portfolios for institutional investors and high net worth individuals.

With absolute commitment to enable borderless digital investing for Nigerians home and abroad, Osibodu believes that to accelerate growth and innovation in the digital investments space, there is a need to make digital investing more accessible for individuals and businesses.

Osibodu’s motivation to found Chaka stemmed off his frustrations from inability to invest in the Nigerian and global stock markets while at the University. A decade afterwards, and now as a member of the CIS, the problem still existed for Nigerians and indeed other Africans.

That led him and his co-founder and CFO, Bolanle Osibodu to venture with the sole aim of democratising digital investing and helping to provide options for diversified returns to Africans and businesses with traditionally limited investment options.

Today, Chaka provides access to 11,000 assets trading on the capital market. To achieve this, it partners regulators to operate within Securities and Exchange Commission’s (SEC) purview and with all assets registered with the Nigerian Stock Exchange (NSE). “We partner with local capital market authorities such as the Central Securities Clearing System Plc (CSCS) to facilitate safekeeping and quick settlement of all securities traded on Chaka. We marry our strict commitment to compliance with our secure, reliable technology to enable companies and individuals to safely access digital investments without restrictions,” Osibodu said.

Describing the Digital Sub-broker License for digital investment platforms granted by SEC to Chaka, he said, “This newly created license allows us to enable multiple brokers via our digital platform. SEC set up licenses to make sure that players within the space are registered and structured in line with set guidelines, with the aim of building investor confidence and ensuring only compliant platforms operate. Also, it proves a much-needed tool for accelerating innovation within the digital investments space. So, for me, I believe innovation and regulation are key to financial technology (fintech) development.

“One does not work without the other. SEC is essential for setting up the common standards and parameters where innovation can happen while protecting customers and fulfilling their broader development mandates. When we think of the long-term impact of regulation as enabling innovation to thrive over years and decades, longevity of this nature is only possible because of forward-thinking regulation. We’re excited for the long-term impact of this new regulation and what it signals for the future.”

He further explained that Chaka became the first platform to have access to the license, as they have been engaging with SEC since inception and even more in the last few months. “Our efforts have accelerated to ensure that both parties are aligned with the innovation possibilities in the market. We are excited that the results of both engagements yielded the first Fintech license from SEC, which no doubt heralds a new age of innovation. We have now broken ground to be able to show SEC our business, our structure, and receive their first fintech license, which recognises the unique role we play in the market.

“This ‘Digital Sub-broker’ license enables us to offer digital investing and further serve as a platform to power other brokers. This is why we will continue to work alongside SEC to maintain open lines of communication to identify opportunities to review, iterate, and solidify compliance regulations for the industry. Also, we will continue to play the role of the ‘safest in the room’ by extending our approach to help power other businesses, thereby enabling a healthier ecosystem for digital investing.”

With the development, Osibodu noted that the next steps would be to continue on the mission to enable digital investing for businesses and individuals in line with the license provision. “We have just launched a brand-new Chaka app for retail investors, Chaka Integrations to help asset managers and financial institutions offer digital investments to their customers, as well as Chaka for Business, which enables direct business onboarding, and provides key trading tools for institutional investors. All available are on chaka.com”

Giving insight into the short/long term impact of the new license on the digital investments space in Nigeria, Osibodu said: “This is SEC’s first FinTech and innovation license, and given their mission, we expect that there will be more clarity given to the market in the short term as to who they can trust. In the long term, we expect more opportunities for Nigerians to grow and build wealth, as well as more innovative initiatives from the SEC. We still believe that they are best suited in the long term to regulate other burgeoning digital investments.”