The Securities and Exchange Commission (SEC) has succumbed to brokers’ pressure and extended the deadline for minimum requirement for all capital market operators to September 30, 2015.
The News Agency of Nigeria (NAN) reports that the commission has been battling with the Chartered Institute of Stockbrokers and the Association of Stockbrokers Houses of Nigeria (ASHON) over the extension.
The extension is contained in a statement pasted at the commission’s web site.
It stated that the approval was given on December 22 at the commission’s board meeting following a review of the status report on the level of compliance by capital market operators.
“The board expressed satisfaction with the efforts made by all operators, particularly those who have complied with the new requirements.
“The board, however, took cognisance of the effect of the global economic situation and approved an extension of the deadline for compliance with the new minimum capital requirements by nine months, to 30th September 2015,” the statement stated.
The commission also commended “the commitment of all stakeholders to building a world class capital market that enables Nigeria to realise its aspiration of a prosperous and peaceful nation”.
The extension came on the heels of the plea by some capital market operators due to the ongoing uncertainties in the country that hampered market growth and development.
SEC, on December 19, 2013, issued a new requirement for capital market operators with December 31 as deadline for operators to recapitalise.
The apex capital market regulator increased minimum capital base for broker/dealer by 329 per cent from the existing N70 million to N300 million.
Broker, which currently operates with capital base of N40 million, will now be required to have N200 million, representing an increase of 400 per cent.
Minimum capital base for dealer increased by 233 per cent from N30 million to N100 million.
Issuing houses, which facilitate new issues in the primary market, will now be required to have minimum capital base of N200 million as against the current capital base of N150 million.
The capital requirement for underwriter also doubled from N100 million to N200 million.
A Registrar will now have a minimum capital base of N150 million as against the current requirement of N50 million.
The minimum capital base for corporate investment adviser remained unchanged at N5 million; individual investment advisers will have to increase their capital base by 300 per cent from N500,000 to N2 million.
Also, dealing members of the exchange are contending with minimum operating standards recently introduced for all the three classes of dealing members, including broker dealers, brokers and dealers.
The new standards address the five broad areas of manpower and equipment; organisational structure and governance; effective processes; global competitiveness and technology.