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307 Capital Market operators meet new capital requirement

By on June 25, 2015

About three months to the deadline for the new capital base requirement, 307 capital market operators have complied, THISDAY checks have revealed.
The Securities and Exchange Commission(SEC)  had set a new minimum capital base for capital market operators that was to be met December 31, 2014.

However, the compliance deadline was extended to September 30, 2015.
SEC recently said the September deadline was sacrosanct and advised operators who were yet to comply to do so. However, data obtained by THISDAY showed that 307 operators complied as at May 30, 2015, representing 65 per cent.
An analysis of the compliance level indicates that 126 brokers/dealers have complied, representing 53 per cent, while 110 are yet to recapitalise. Issuing houses have recorded 80 per cent compliance  as 67 out of 83 have recapitalised, while 16 are yet to comply.
For Registrars, 17 out of 21 or 81 per cent have met the new capital base, leaving four. In the case of Trustees, 27 out of 36 have complied, indicating 77 per cent, 50 per cent or two out of the four  Rating Agencies have recapitalised. For Fund Managers, 68 out of 91 have met the new capital base, while 23 are yet to recapitalise.
The Director General of SEC, Mr. Mounir Gwarzo had said the commission would conduct a verification exercise at the end of this recapitalisation to confirm compliance.
Speaking at the last  Capital Market Committee first quarter meeting in Lagos, Gwarzo had said: “The operators are all aware of the gracious extension the SEC Board granted. We set up a market Committee comprising SEC, Nigerian Stock Exchange, NSE and Central Securities Clearing System Plc, which have been working with Trade Groups to address related issues. Based on the latest returns we have received from operators the level of compliance is encouraging although we will conduct a verification exercise at the end of this recapitalisation to confirm compliance.”
According to the new capital requirement stipulated by SEC in December 2013,  Broker/Dealer now requires  N300 million, up  from N70 million. For broker only the capital obligation was raised from N40 million to N200 million while for dealers it was raised from N30 million to N100 million.
The minimum capital requirement for issuing house was also increased from N150 million to N200 million while that of underwriter from N100 million to N200 million.
For a registrar, the minimum capital requirement was raised to N150 million from N50 million while for trustee business, the capital requirement was increased  to N300 million from N40 million. Rating agency was increased from N20 million to N150 million, among others.
A United States based financial markets operator, Mr. Tayo Shenbanjo last week advised  stockbroking firms that are yet to comply to consider merger option to meet the recapitalisation requirement.

 

[ThisDay]