Lagos – About 92 firms may not be able to meet the Sept. 30, 2015 recapitalisation deadline, as stipulated by the Securities and Exchange Commission(SEC), according to an investigation by the News Agency of Nigeria (NAN).
A SEC management source, who pleaded anonymity, told NAN in Lagos that only 128 stockbroking firms out of the 220 active and registered stockbroking firms on the Nigerian Stock Exchange (NSE) met the capital requirement as of July.
He said that between 140 and 150 stockbroking firms would likely meet the recapitalisation requirement at the end of the exercise on Sept. 30.
The source 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.
NAN reports that SEC recently, 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.
The Director-General of SEC, Mr Mounir Gwarzo, told NAN recently that the Sept. 30 deadline for the new minimum capital for market operators would not be extended again.
Gwarzo said that the commission had no plans to extend the new deadline, stressing that it had come to stay.
NAN reports that SEC on Dec. 19, 2013 issued a new capital requirement for capital market operators with Dec. 31, 2014 as deadline for operators to recapitalise.
The deadline was, however, extended to Sept. 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. (NAN)