Capital base: No extension of deadline – SEC

The Securities and Exchange Commission says the deadline for recapitalisation by capital market operators still remains December 31.
Obi Adindu, the Communications Adviser to the SEC Director-General, told the News Agency of Nigeria on Thursday in Lagos that the commission would enforce the policy at the end of the exercise.
NAN reports that SEC had on December 19, 2013 issued a new capital requirement for capital market operators, with December 31, 2014 as deadline for recapitalisation.
A breakdown of the new capital requirement showed that a broker/dealer now requires a minimum capital of N300 million or an increase of 328.57 per cent, compared with the initial capital of N70 million.
A broker is now required to increase his capital to N200 million from N40 million, while a dealer’s minimum capital now stands at N100 million, as against N30 million.
The operational capital requirement of an Issuing House also rose to N200 million from N150 million, underwriters are now expected to have N200 million as working capital, from N100 million.
Under the new capital framework, a registrar’s operational capital has been reviewed up to N150 million, from N50 million.
The capital requirement of Trustees has also improved to N300 million, from N40 million, while that of a rating agency has gone up from N20 million to N150 million.
Adindu said: “The new capital regime was an immutable policy and would not be suspended.”
He said that the policy was endorsed by both the SEC board and the Minister of Finance, Dr. Ngozi Okonjo-Iweala.
The Communications Adviser also said: “The extant realities in the market had compelled the implementation of the policy.”
Adindu said that serious-minded operators were responding to the commission’s mandate, adding that most market operators would comply with the policy.
“The new capital regime will be implemented in the interest of investor protection and for the good of the market,” Adindu said.
Emeka Madubuike, the President of the Association of Stockbroking Houses of Nigeria, had earlier told NAN that the meeting with SEC’s Director-General, Arunma Oteh, on the issue ended in a deadlock.
Madubuike, however, said that the association would continue to seek audience with the commission to resolve the recapitalisation issue.
According to him, ASHON was not against the new minimum capital base but is insisting that capital market operators should be carried along in policy formulation.