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Recapitalisation: SEC to release final list of compliant operators December

By on November 5, 2015

Strong indications emerged on Monday that the Securities and Exchange Commission (SEC) will in December, release the final list of market operators, who have complied with the new minimum capital requirement.

SEC had in 2013 announced new minimum capital requirements for all categories of market operators in pursuant to Section 313(6) of the Investments and Securities Act (ISA) 2007. The compliance deadline expired September 30, 2015 while SEC released a provisional list showing that 437 operators met the capital requirement.

THISDAY had reported that preparatory to releasing the final list, SEC had enlisted the services of over 15 accounting firms to verify the sources of funds by the market operators that complied with the new minimum capital requirement.

Investigations by THISDAY have revealed that the accounting firms have started reporting their findings on the verification  that would enable able SEC come out with the final list.

“The accounting firms have started their job and are already sending in their findings.  The findings would be cross checked by auditors of SEC and other independent accounting firms that are not among those engaged for the exercise. At the end of the verification process, the commission will now come out with the final list and that will not be later than December 2015,” a capital market said.

It was gathered that market operators who refuse to open their books for the verification exercise may risk being excluded from the final list “as that implies that they have something to hide.”

A market source explained that the focus of the verification exercise would be more on those operators who filed their compliance requirement at the late hour.

“SEC has emphasised the need for this verification especially given the fact that 20 to   30 per cent  submitted their  compliance few days  to the deadline.  SEC has to go in, verify and authenticate the source of funds.  After the verification, SEC will not come out with the final list,” the source said.

The commission had advised investors to verify the compliance status of their various preferred market operators. According to the regulator, the investing public should verify the compliance status of their preferred operators by checking the list posted on the commission’s website.

SEC increased minimum capital base for broker/dealer by 329 per cent from the existing N70 million to N300 million. A broking firm which operated with capital base of N40 million, now has N200 million, representing an increase of 400 per cent.

While the minimum capital for dealer was raised by 233 per cent from N30 to N100 million, that of issuing houses (facilitators of new issues in the primary market) was increased to N200 million from N150 million. The capital requirement for a company to underwrite issues was also raised from N100 million to N200 million, just as share registration companies now have to raise their capital base from N50 to N150 million. The minimum capital for corporate investment advisers was however retained at N5 million, unlike individual investment advisers who would only operate with a 300 per cent hike in capital base from N500,000 to N2 million.

 

[ThisDay]