70 stockbroking firms risk SEC hammer

About 70 stockbroking firms risk being deregistered by the Securities and Exchange Commission (SEC) if they are unable to meet the regulators deadline for recapitalization by September 30.
As of July, 2015 only 128 of the 220 registered stockbroking firms on the Nigerian Stock Exchange (NSE) have met the capital requirement.
A management source of the Securities and Exchange Commission (SEC) revealed to the News Agency of Nigeria (NAN) that by implications, 92 firms may not be able to meet the September 30, 2015 recapitalisation deadline.
The SEC source envisaged that between 140 and 150 stockbroking firms would likely meet the recapitalisation requirement at the end of the exercise on Sept. 30. He said that some of the stockbroking firms had commenced moves to reclassify their businesses, to avoid the commission’s hammer.
He also said that many workers would be thrown into the labour market if the companies failed to scale through or reclassify their businesses on time.
SEC in a circular directed all capital market operators proposing reclassification to notify the Commission not later than July 31, 2015. It said that the directive also applied to capital market operators opting for mergers, acquisitions or any other form of business combination.

Read also: Stock exchange purge: 88 stock market operators may lose licences

The Director-General of SEC, Mr Mounir Gwarzo, said recently that the September 30 deadline for the new minimum capital for market operators would not be further extended.
According to Gwarzo, the commission had no plans to extend the new deadline, stressing that it had come to stay. SEC on December 19, 2013 issued a new capital requirement for capital market operators with December 31, 2014 as deadline for operators to recapitalise.
The deadline was, however, extended to September 30, 2015 by the commission in December 2014 following pressure and protests by some stockbrokers.
The apex capital market regulator increased the minimum capital base for brokers/dealers by 329 per cent from the existing N70 million to N300 million.
A Broker, who currently operates with a capital base of N40 million, will now be required to have N200 million, representing an increase of 400 per cent.
The minimum capital base for dealers increased by 233 per cent from N30 million to N100 million.

RipplesNigeria… without borders, without fears

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now