Lagos – The Association of Stockbroking Houses of Nigeria (ASHON) on Tuesday said that extension of the recapitalisation for capital market operators would reduce uncertainties in the nation’s bourse.
Mr. Emeka Madubuike, ASHON President, told newsmen in Lagos that the association would work with SEC and the Nigerian Stock Exchange to ensure market growth and development.
Madubuike said that the recapitalisation extension had reinvigorated the association in assisting the market regulators to position the market as the engine room for economic growth and development.
“Without the development of the market, the economy cannot grow,” he said.
Madubuike said that the extension would bring a measure of respite to stockbrokers and the market.
He, however, commended SEC’s board for listening to the operators yearning.
“We appreciate all people that listened to our pleas and acted accordingly,” Madubuike said.
Mr Ariyo Olushekun, the immediate past President, Chartered Institute of Stockbrokers (CIS), commended the commission for extending the deadline by nine months.
Olushekun said that the commission did well by recognising that situations in the market were not conducive for increase in capital base.
“The market has been declining in the past three months and it affected the capitalisation exercise,” he said.
Olushekun said that brokers who met the new capital requirement had fallen short because of decline in prices of equities.
He said that “the extension gives operators more hope and room to strategies to ensure full compliance”.
NAN reports that SEC, on Dec. 29, extended the deadline for minimum requirement for all capital market operators to Sept. 30, 2015 against the initial Dec. 31, 2014 date.
SEC, on Dec. 19, 2013, issued a new capital requirement for capital market operators with Dec. 31 as deadline for operators to recapitalise.
The apex capital market regulator increased minimum capital base for broker/dealer by 329 per cent from the existing N70 million to N300 million.
Broker, which currently operates with capital base of N40 million, will now be required to have N200 million, representing an increase of 400 per cent.
Minimum capital base for dealer increased by 233 per cent from N30 million to N100 million.
Also, issuing houses, which facilitate new issues in the primary market, will now be required to have minimum capital base of N200 million as against the current capital base of N150 million.
The capital requirement for underwriter also doubled from N100 million to N200 million.
A Registrar will now have a minimum capital base of N150 million as against the current requirement of N50 million.
While the minimum capital base for corporate investment adviser remained unchanged at N5 million, individual investment advisers will have to increase their capital base by 300 per cent from N500,000 to N2 million.
Also, dealing members of the exchange are contending with minimum operating standards recently introduced for all the three classes of members including broker dealers, brokers and dealers.
The new standards address the five broad areas of manpower and equipment; organisational structure and governance; effective processes; global competitiveness and technology.
