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Over 100 stockbroking firms comply with new capitalisation

By on January 1, 2015

Over 100 market operators playing the role of broker/dealer were able to comply with the new minimum capital requirement  before the Securities and Exchange Commission (SEC) extended the deadline by nine months to September 30, 2015.
SEC  had given capital market operators till December 31, 2014 to comply with the new capital base, which requires  an operator playing the role of broker dealer  to have N300 million capital as against the existing N70 million.
However, the commission on Monday announced an extension of the deadline to September 30, 2015.
“The Board expressed satisfaction with the efforts made by all operators, particularly those who have complied with the new requirements. The Board however took cognisance of the effect of the global economic situation and approved an extension of the deadline for compliance with the new minimum capital requirements by nine months, to 30th September 2015,” SEC had said.
According to the list of market operators who complied with the new capital requirement as at December 24, 2014, over 100  broker/dealers were among.
Market operators said the extension of the deadline would  bring a big relief to the market, which has been bearish partly because of the recapitalisation directive.
The leadership of the stockbroking community had insisted on extending the recapitalisation deadline to enable them meet with  the SEC management on how best brokers could comply with the requirement.
However, indicators came  the middle of December that the apex regulator was mulling over extending the deadline.

Market sources close to SEC had said given the current bearish  situation in the market and need to be seen as being proactive and sensitive to the plight of operators, the commission is considering  moving the deadline.
“All of us operating in the economy and financial sector and know what is going on right now. It is will be a high level of insensitivity if a regulator, knowing that  the market has lost over N3 trillion within three months, still goes ahead to close down the offices of operators because they fail to recapitalise. This is the line of thinking of many members of the board of the commission and I am sure the deadline will be shifted,” the source said.
The source added that operators, who have been saving (by buying stocks) towards the recapitalisation, have lost significant part of their investments following the dip   the market has suffered in last three months.
“It is has been really tough for operators and investors in the past weeks and it will be a big relief for us if  it is true that SEC is  planning to move the deadline from December 31, 2014,” a broker  had said.

 

[ThisDay]