The Director-General, Securities and Exchange Commission (SEC), Ms Arunma Oteh, on Wednesday said there was no going back on the December 31, 2014 re-capitalisation deadline for capital market operators.
Oteh made this known at the third quarter Capital Market Committee media briefing in Lagos.
She said that the new minimum capital for market operators was in the best interest of the market, insisting that the deadline would not be extended.
She also said that new entrants into the market must comply with the new minimum capital requirement before they would be given license to operate.
Oteh said that the capital market was dependent on the state of the operators, recalling that 2008/ 2009 depression in stock market was difficult for Nigerian investors and operators because of poor capital base.
“This issue has been ongoing for a number of years; SEC in 2007 announced a new capital requirement for market operators but did not implement it,” she stated.
She explained that the commission waited until 2012 to conduct an industry-wide consultation before the introduction of the new capital requirement.
According to her, the policy is a board decision endorsed also by the Minister of Finance, Dr Ngozi Okonjo-Iweala.
The director-general said that the extant realities in the market had compelled the implementation of the policy and must be embraced by all capital market operators.
She said that the commission was satisfied with efforts being made by various firms to ensure compliance with the regulation before the deadline.
“Based on the reports we have received from our implementation team, we are happy on the progress being made by various firms to meet the requirement,” she said.
According to her, change is always difficult but various trade groups are strategising to ensure full compliance to the new capital requirement such as mergers and acquisitions.
“We will expect that every capital market operator will meet the requirement by Dec. 31, 2014,” Oteh said.
The News Agency of Nigeria (NAN) recalls that SEC issued the recapitalization directive to market operators on Dec. 19, 2013.
A breakdown of the new capital requirement obtained by NAN showed that broker/dealer requires N300 million minimum capital, an increase of 328.57 per cent compared with existing capital requirement of N70 million.
Broker is now required to increase its capital to N200 million from N40 million, while a dealer’s minimum capital now stands at N100 million, from N30 million.
Issuing house operational capital requirement has also been increased to N200 million from N150 million, while underwriters are now expected to have N200 million as working capital from N100 million.
Under the new capital regime, a registrar’s operational capital has been reviewed up to N150 million from N50 million.
Trustees capital requirement also rose to N300 million from N40 million, while a rating agency requires N150 million capital, up from N20 million. (NAN)
Source : Leadership