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Recapitalisation: 47 market operators apply for reclassification, merger

By on September 15, 2015

With 17 days left for capital market operators to comply with the new minimum capital base set by the Securities and Exchange Commission (SEC) in 2013, 47 operators have applied to either merge or reclassify their businesses, THISDAY checks have revealed.
SEC had in December 2013 announced an increase in minimum capital requirements  for capital market functions under a new capital structure and gave them December 31, 2014 as deadline. However, the date was extended to September 30, 2015.

The capital market regulator had also allowed operators with multiple functions to step some of them down for lower requirements while encouraging consolidation amongst smaller players by offering to waive merger/acquisition fees.

THISDAY checks at the weekend showed that 47 operators have embraced the options of stepping down some of their functions and consolidation.
Specifically, while 36 operators applied to SEC to step down some of their functions, 11 applied for merger and acquisition.
Some of the operators that are stepping down their functions include: Arian Capital Market Limited, Associated Asset Management Limited, Camry Securities Limited, Cashcraft Asset Management Limited, Cashville Investment & Securities Limited, Chartwell Securities Limited,
Clearview Investments Company Limited, DBSL Securities Limited, Dependable Securities Limited.
Others are: Fidelity Securities Limited, Investment Centre Limited, FIS Securities Limited, LB Securities Limited, Mission Securities Limited, Molten Trust Limited, Pivot Trust & Investment Company Limited,
Support Services Limited, Tower Assets Management, Topmost Securities Limited, Transafrica Financial Services Limited.
On the other hand, the 11 operators that  have opted for merger include: Alangrange Securities Limited; Crown Capital Limited; DS Brokerage Services Limited; Enterprise Stockbrokers Plc; Excel Securities Limited; First Stockbrokers Limited; LMB Stockbrokers Limited; Summa Guaranty & Trust Company Limited; Vision Trust & Investment Limited and  Woodland Capital Market Plc. Forte   Financial Limited, which is broker/dealer and issuing house has proposed to merge with Alangrange Securities Limited, Crown Capital Limited and Express Portfolio Services Limited.

Director General of SEC, Mounir Gwarzo had said the September 30 deadline remained sacrosanct, emphasing, however, that   the commission was ready  to support the operators in their efforts to comply with the new capital requirements.
“That was why we came with a directive that anyone who wants to step down any of their functions,  say if you are a broker dealer, you want to step down to focus only on being a broker or dealer with a lower minimum requirement, we are ready to accept that.  And   we told them to quickly file their applications so that they will be able to step down to a lower capital base.
“We equally said that we are ready to support them with any merger and acquisition that they want to go into even to the point of looking at some of the fees and charges that are supposed to be paid for merger and acquisition. We have gone this extra mile so that we can be able to provide them with the necessary incentives. But the issue of the deadline, September 30, is sacrosanct. We are not going to move away from it. The market has to comply with that,” Gwarzo said.

 

[ThisDay]