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437 market operators meet new capital requirement

By on October 6, 2015

A total of 437 capital market operators have met the new minimum capital requirement, which was announced by the Securities and Exchange Commission in December 2013.

A provisional list published on the SEC’s website following the expiration of the September 30 deadline showed that apart from the operators that met the new capital requirement, four merger applications were awaiting approvals/court sanctioning.

However, the commission has yet to announce the fate of market operators that failed to meet the deadline as it plans to verify the submissions of the capital market operators before taking action.

A note attached to the list read, “The above provisional list is based on the submissions by capital market operators, who are eligible to undertake capital market activities. However, the commission would be engaging accounting firms to conduct capital verification, after which a final list would be made public.”

There had been speculation last week that the commission might extend the deadline after repeatedly saying it would not do so, but an industry-wide committee on the minimum capital requirement has released procedures that investors can follow to move their stock account from operators that fail to meet the requirement to those that did.

This, according to an operator, who prefers not to be named, indicates the commission may choose to withdraw the operating licences of CMOs that failed to meet the requirement as it initially planned.

Nine firms are involved in the mergers. Three of the firms – Woodland Capital Plc, Covenant Securities & Asset Management Limited and Cradle Trust Finance & Securities Limited are processing a merger with the resulting entity to be named Woodland Capital Plc.

First Stockbrokers Limited and Summa Guaranty & Trust Company Limited are merging to form First Summa Capital Management Limited, while Signet Investment & Securities Limited and Vision Trust & Investment Limited are processing a merger that will result in Signet Investment & Securities Limited.

Also, Securities and Capital Management Company Limited and Strand Capital Partners Limited are merging to form Constellation Capital Limited.

As of last Tuesday, a day before the deadline expired, data obtained from the SEC showed that 384 market operators had met the new minimum requirement with 36 others processing reclassification of their functions and another 12 processing mergers.

So far, it is not clear how many operators failed to meet the deadline and the commission has not provided a consolidated list of operators.

Although the commission could not be reached for comments, data from its website last Tuesday showed that there were 304 operators with complete registration and 188 others with expired or incomplete registration in the market, making a total of 492 operators as of September 7.

 

[Punch]