Over 100 broker-dealers operating in Nigeria’s capital market have been able to comply with the new minimum capital requirement established by Nigeria’s Securities and Exchange Commission (SEC). The Nigerian Stock Exchange’s website lists 228 active broker-dealers operating in Nigeria.
The SEC increased the required minimum capital requirement for broker-dealers to N300M from N70M. The original deadline for brokerage firms to meet the new requirement was December 31, 2014. The SEC has just extended the deadline by nine months to September 30, 2015.
On the extension of the deadline for increased capital requirements, the SEC said “The Board expressed satisfaction with the efforts made by all operators, particularly those who have complied with the new requirements. The Board however took cognizance 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.”
As of December 24, 2014, over 100 broker-dealers had met the SEC’s increased capital requirements.
Market operators have said the extension of the deadline brings a big relief to the market operators, given the bearishness of the market, partly due to the SEC’s recapitalization directive.
Sources close to SEC have disclosed that the SEC was being proactive and sensitive to the plight of broker-dealers, given the current bearish situation of the Nigerian capital market.
“All of us operating in the economy and financial sector know what is going on right now. It is will be a high level of insensitivity if a regulator, knowing that the market has lost over N3T within three months, still goes ahead to close down the offices of operators because they fail to recapitalize. This is the line of thinking of many members of the board of the commission and I am sure the deadline will be shifted,” a source said.
The source added that operators, who have been accumulating shares towards the recapitalization, had experienced significant depreciation in their share holdings, given the dip the market has suffered in the last three months.
“It is has been really tough for operators and investors in the past weeks and it is a big relief for us that the SEC is moving the deadline from December 31, 2014,” a broker stated.
Source: Home | THISDAY LIVE.