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Reserve Bank of Malawi revokes Alliance Stockbrokers’ license

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The Reserve Bank of Malawi (RBM) has revoked the licence for Alliance Stockbrokers Limited, a subsidiary of Alliance Capital Holdings Limited, barely two weeks after another subsidiary of the company, Alliance Capital Limited, faced a liquidation order from the High Court’s Commercial Division.

Alliance Stockbrokers Limited started its operations in the country in October 2018.

A statement from the central bank indicates that revoking of the licence is due to non-compliance with financial services laws by the company, such that it is no longer authorised to conduct business in Malawi.

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The statement adds that the revocation of the licence does not affect any right, obligation, or liability that the company has under agreement, transaction or arrangement entered into before the revocation of the licence.

“The general public is further informed that clients of the company were already transferred to existing stockbrokers, hence the revocation of the licence will not adversely impact the rights of the clients,” the statement reads.

Officials from the central bank were not immediately available to outline some of the financial laws which the company failed to comply with to warrant the revocation of the licence.

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Information shows that the company launched its operations in Malawi in October 2018, adding itself to a list of stockbrokers that offer services such as serving as a platform for investors to buy and sell listed shares and be able to invest in listed debt instruments.

Its sister company, Alliance Capital Limited faced a liquidation order from the High Court for falling short of being a sound financial institution to operate in the financial sector in Malawi.

It was discovered that the company neglected its mandate to be a financial advisory firm and turned to a lender, with some people failing to repay the loans.

The company had a negative capital of over K300 million against the central bank’s requirement of K50 million.

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