Who's Who in the Market

An investorA person or organisation that commits capital with the expectation of a financial return. meeting specified financial or professional criteria for access to certain private offerings.

Example: A private fund verifies that a subscriber satisfies the applicable accredited-investor test.

Accredited Investor is an investor meeting specified financial or professional criteria for access to certain private offerings; the role should be understood through authority and incentives: who the participant represents, what assets or information it controls and which conflicts may arise.

A private fund verifies that a subscriber satisfies the applicable accredited-investor test.

For Accredited Investor, verify identity, regulatory or eligibility status, capacity in the transaction, compensation, conflicts, custody arrangements and the records the participant must provide.

The natural person who ultimately owns, controls, or benefits from an account or investmentAn asset or commitment of money made with the expectation of future income, growth, or both..

Example: A company opens an investment account, but its controlling individual must still be identified as beneficial owner.

A beneficial owner is the natural person who ultimately owns, controls or receives the benefit of an account or asset, even when another name or legal entity appears on the formal record.

A company may open an investment account as the registered customer, but an individual who controls the company or ultimately benefits from the investment may need to be identified as its beneficial owner. A nominee can also hold securities on record for someone else.

Financial institutions request this information to see through layers that could hide control or proceeds. The applicable ownership or control threshold varies by rule and jurisdiction. Beneficial ownership does not always replace legal title; it explains the person behind the formal holder.

A person or firm that executes securities transactions for clients.

Example: An investor instructs a broker to buy 5,000 listed shares.

Broker is a person or firm that executes securities transactions for clients; the role interacts with issuers, investors, venues and intermediaries, but the role does not by itself determine whether the participant acts as principalThe original amount of money invested or lent, excluding later returns., agent or adviser in a specific transaction.

An investor instructs a broker to buy 5,000 listed shares.

A practical review of Broker separates the participant's marketing claim from its contractual authority, financial capacity and enforceable obligations. Also compare Broker-Dealer, defined here as a firm that acts as an agent for clients and as a principal in its own trades.

A firm that acts as an agent for clients and as a principal in its own trades.

Example: The broker-dealer executes a client order and also makes markets in bonds.

Broker-Dealer is a firm that acts as an agent for clients and as a principal in its own trades; the role is defined by whose money is used, which services are provided, what licences or eligibility rules apply and how the participant is compensated.

For example, the broker-dealer executes a client order and also makes markets in bonds.

Before dealing with Broker-Dealer, confirm the legal entity, authorised representatives, fee schedule, complaint route and whether client assets are segregated; the role can be sophisticated and still make poor investment decisions.

A person or firm that buys and sells securities for its own account.

Example: A bond dealer quotes prices from its own inventoryGoods held for sale, production, or consumption in the production process..

Dealer is a person or firm that buys and sells securities for its own account; the role is defined by whose money is used, which services are provided, what licences or eligibility rules apply and how the participant is compensated.

A bond dealer quotes prices from its own inventory.

Assess Dealer by asking whether it acts for itself or for a client, which duties apply and who bears loss if an instruction, settlement or recommendation fails; the role can be sophisticated and still make poor investment decisions.

An organisation that manages investments and other financial affairs for one or more wealthy families.

Example: A family office allocates capital among public markets, propertyLand and buildings held for use, rent, development, or capital appreciation., and private equityInvestment in privately held companies, often with active ownership and a multi-year exit plan..

Family Office is an organisation that manages investments and other financial affairs for one or more wealthy families; the role is defined by whose money is used, which services are provided, what licences or eligibility rules apply and how the participant is compensated.

A family office allocates capital among public markets, property, and private equity.

For Family Office, verify identity, regulatory or eligibility status, capacity in the transaction, compensation, conflicts, custody arrangements and the records the participant must provide.

A person with substantial investable assets, based on a provider's or regulator's threshold.

Example: A private bank offers specialised portfolioThe complete collection of investments owned by an investor or managed under one mandate. management to a high-net-worth client.

High-Net-Worth Individual is a person with substantial investable assets, based on a provider's or regulator's threshold; the role is defined by whose money is used, which services are provided, what licences or eligibility rules apply and how the participant is compensated.

For example, a private bank offers specialised portfolio management to a high-net-worth client.

For High-Net-Worth Individual, verify identity, regulatory or eligibility status, capacity in the transaction, compensation, conflicts, custody arrangements and the records the participant must provide.

An organisation that invests large pools of money on behalf of beneficiaries or clients.

Example: Pension funds, insurers, and mutual funds are institutional investors.

Institutional Investor is an organisation that invests large pools of money on behalf of beneficiaries or clients. The role interacts with issuers, investors, venues and intermediaries, but the role does not by itself determine whether the participant acts as principal, agent or adviser in a specific transaction.

Pension funds, insurers, and mutual funds are institutional investors.

Assess Institutional Investor by asking whether it acts for itself or for a client, which duties apply and who bears loss if an instruction, settlement or recommendation fails; size or status does not remove conflicts of interest.

A financial institution that advises on capital raising, mergers, acquisitions, and securities issuance.

Example: The investment bank underwrites a company's public share offer.

Investment Bank is a financial institution that advises on capital raising, mergers, acquisitions, and securities issuance; the economic function of the role is to supply capital, advice, execution, liquidity, underwriting or administration within the investment chain.

The investment bank underwrites a company's public share offer.

Before dealing with Investment Bank, confirm the legal entity, authorised representatives, fee schedule, complaint route and whether client assets are segregated; the same organisation may act in several capacities, so the role in each transaction must be stated.

The documented instructions and limits governing how money may be invested.

Example: A mandate may permit only investment-grade local-currency fixed incomeInvestments that create contractual or expected interest and principal payments. with a maximum 20% in one issuer.

An investment mandate is the written set of objectives, permissions and limits governing how money may be invested. It turns a broad goal into rules a manager can follow and be assessed against.

A mandate might allow only investment-grade naira fixed income, limit one issuer to 20%, require minimum liquidity and name a benchmarkA reference index or rate used to evaluate a fund's performance.. A purchase outside those limits breaches the mandate even if it later makes money.

Read the permitted assets, concentrationThe degree to which a portfolio depends on a small number of holdings, sectors, or issuers., currency, borrowing, derivatives, liquidity, benchmark and review process. A mandate controls the range of decisions; it does not guaranteeA contractual promise by another party to meet an obligation if the primary debtor does not. good choices or positive returns within that range. Check current holdings against the rules and revise a personal mandate when goals or constraints materially change.

The identity and due-diligence checks a financial institution performs before serving an investor.

Example: A manager requests identification, address, bank details, and source-of-funds information before activating an account.

Know Your Customer, or KYC, is the process a financial institution uses to confirm a customer's identity and understand relevant risks before and during the relationship. It supports anti-money-laundering, fraud prevention and regulatory compliance.

A fund managerThe licensed firm responsible for investment decisions and day-to-day management of a fund. may request an identity document, address, bank account, occupation and source-of-funds information before activating an investment account. A company account may also require incorporation documents and details of its beneficial owners.

KYC is not always completed only once; material changes or periodic reviews can require updated documents. Submit sensitive information only through verified official channels and ask why it is needed and how it is protected. Passing KYC confirms identity checks, not that an investment is suitable or safeA contract providing a right to future equity under specified financing or liquidity events, without being ordinary debt..

The ease and speed with which an investment can be converted into cash without a major price concessionA contractual right to build, operate, or collect revenue from an asset or service for a stated period..

Example: A money market fundA mutual fund that invests mainly in short-term, relatively liquid instruments such as treasury bills and deposits. redeemable within a few business days is generally more liquid than direct property.

Liquidity is the ability to turn an investment into cash quickly, in the required amount and without accepting a large price reduction. An asset can be liquid for a small trade but illiquid for a large one.

A money market fund normally redeemable within a few business days is more liquid than a building that may take months to sell. A listed securityA security admitted to trading on a recognised exchange. can still be illiquid when few buyers trade it or when the bid-offer spreadThe difference between the price at which units can be sold and the price at which they can be bought. is wide.

Check the actual sale or redemptionThe process of selling fund units back to the fund in exchange for cash. process, settlement time, withdrawal limits and price available for the intended amount. Market liquidity can worsen during stress, and a provider may have exceptional suspension rights. Match near-term obligations with assets whose access and price risk remain acceptable under difficult conditions.

A dealer that continuously quotes prices at which it is willing to buy and sell.

Example: The market maker posts both a bid and an ask for an ETF.

Market Maker is a dealer that continuously quotes prices at which it is willing to buy and sell; the role should be understood through authority and incentives: who the participant represents, what assets or information it controls and which conflicts may arise.

The market maker posts both a bid and an ask for an ETF.

Assess Market Maker by asking whether it acts for itself or for a client, which duties apply and who bears loss if an instruction, settlement or recommendation fails; size or status does not remove conflicts of interest.

A large institution meeting regulatory criteria to trade certain restricted securities.

Example: An insurer qualifies to buy an institutional bond placement.

Qualified Institutional Buyer is a large institution meeting regulatory criteria to trade certain restricted securities; the role is defined by whose money is used, which services are provided, what licences or eligibility rules apply and how the participant is compensated.

An insurer qualifies to buy an institutional bond placement.

For Qualified Institutional Buyer, verify identity, regulatory or eligibility status, capacity in the transaction, compensation, conflicts, custody arrangements and the records the participant must provide; the role can be sophisticated and still make poor investment decisions.

An individual investing personal money rather than managing institutional assets.

Example: A retail investor buys ₦50,000 of fund units through an app.

Retail Investor is an individual investing personal money rather than managing institutional assets; the role should be understood through authority and incentives: who the participant represents, what assets or information it controls and which conflicts may arise.

A retail investor buys ₦50,000 of fund units through an app.

Assess Retail Investor by asking whether it acts for itself or for a client, which duties apply and who bears loss if an instruction, settlement or recommendation fails.

An assessment of an investor's ability and willingness to accept investment losses and uncertainty.

Example: An investor with stable income and a 15-year horizon may accept more equity risk than someone funding rent next month.

A risk profile describes how much investment uncertainty and loss a person can reasonably accept. It combines willingness to take risk with financial ability and need to bear it.

An investor with stable income, emergency savings and a 15-year goal may be able to hold more shares than someone who needs rent money next month. Even if the second person says they enjoy risk, the short deadline gives little capacity to recover from a loss.

A questionnaire is a starting point, not a permanent label. Review time horizon, income stability, debt, dependants, emergency funds and reaction to realistic loss amounts. Use separate profiles for separate goals where appropriate, and update them after major life or financial changes.

A licensed intermediary that buys and sells exchange-traded securities for clients.

Example: The stockbroker submits the investor's order to the exchange.

Stockbroker is a licensed intermediary that buys and sells exchange-traded securities for clients; the economic function of the role is to supply capital, advice, execution, liquidity, underwriting or administration within the investment chain.

The stockbroker submits the investor's order to the exchange.

Assess Stockbroker by asking whether it acts for itself or for a client, which duties apply and who bears loss if an instruction, settlement or recommendation fails; the same organisation may act in several capacities, so the role in each transaction must be stated.

The expected period before invested money will be needed.

Example: Money required in six months has a shorter horizon than retirement savings intended for 20 years.

Time horizon is the expected period before money will be needed for a goal. It helps determine how much price fluctuation and illiquidity the investment can reasonably tolerate.

Money for a school fee due in six months has a short horizon and should not depend on a volatile share priceThe market price at which one share is quoted or traded.. Retirement money not needed for 20 years has more time to recover from market declines, although a long horizon does not prevent loss.

Give each goal its own amount and date instead of assigning one horizon to the whole household. As the date approaches, reassess whether risk should be reduced and whether withdrawals need to be prepared. Unexpected needs are handled with separate emergency liquidityCash or liquid assets available to meet urgent needs without selling long-term investments at a bad time., not by pretending every long-term investment is immediately available.

An investor recorded as owning units in a collective investment fund.

Example: A person holding 250,000 units participates proportionally in the fund's value and eligible distributions.

A unitholder is an investor recorded as owning units in a collective investment fund. The units represent a proportional interest in the fund under its legal structure and documents.

If an investor owns 250,000 units priced at ₦2 each, the holding is worth ₦500,000 before any applicable dealing adjustment. Eligible distributions and voting or information rights depend on the number and class of units held.

A unitholder does not personally choose or directly possess each securityA tradable financial claim or ownership interest, such as a share, bond, or fund unit. in the portfolio. The manager, trustee, custodianA licensed institution that safeguards a fund's cash and securities separately from the manager's own assets. and other providers perform their stated roles. Keep account statements and check unit count, class, price and transactions. Rights, fees and redemption terms come from the fund's governing documents.