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Recapitalisation: SEC extends reclassification notification to August 31

By on August 21, 2015

The Securities and Exchange Commission (SEC) has granted an extension to capital market operators (CMO), who intend to reclassify their functions or merger their businesses in view of the recapitalisation exercise by one month.
SEC had last month directed market operators, which may  be considering a reclassification  to notify the commission  not later than July 31. However, the deadline for the notification has been extended to August 31, 2015.
In a statement pasted on  its website yesterday,  SEC said  that the “it has  granted an extension on the notification of intention by  CMO considering reclassification of function, reduction of functions or merger/acquisition in view of the recapitalization exercise, till August 31, 2015.”

The apex capital market regulator, however, added that operators should not  note that conversion/migration to any of the options is not automatic as routine regulatory requirements must be fulfilled.

According to the commission,  to ensure a seamless and less rigorous exercise, it has  reviewed the procedures on the various options.  For instance, any  Broker/Dealer intending to become a Sub-Broker is required to  file an application and duly completed Form SEC 2C (in duplicate) together with: a recommendation letter from a sponsoring Broker/Dealer; a copy of the agreement with the sponsoring Broker/Dealer specifying the rights and obligations of the Sub-Broker and the Broker/Dealer and  evidence  of minimum paid-up capital of N5million.
Already, as the September 30, 2015  recapitalisation deadline  draws closer,  some operators have started lobbying for another shift in the date, which was moved from December 31, 2014.

Some operators, who are aware of the move for new extension, had told THISDAY that while the first extension by SEC was commendable, the market situation had not changed, hence the fresh lobby for another extension.
“The market has remained bearish between when SEC granted that extension and now. We have less than two months to the deadline. But nothing has changed. Operators who had expected to sell part of their investments in order to recapitalise have not been able to do so because the market remains bearish. So any fresh push for another extension, to me, is justifiable. I think SEC should consider this,” one of the operators said.

 

[ThisDay]