Lagos -The meeting of the Securities and Exchange Commission (SEC) with capital market operators on the new capital requirement has ended in a deadlock.
The meeting ended in a deadlock because SEC refused to accommodate some suggestions of the operators on the new minimum capital requirements.
Emeka Madubuike, President, Association of Stockbroking Houses of Nigeria (ASHON), confirmed the development in Lagos
Madubuike said that the meeting with SEC executive management did not yield any result as both parties failed to reach a compromise.
He said that the stockbrokers would seek audience with the commission's board to discuss their reservations on the new capital requirement issued by SEC.
“We want to follow due process in the interest of the market and we are going to discuss with SEC's board,” Madubuike said.
He said that the stockbrokers decided to follow due process in order not to overheat the system and the market.
SEC, had on December 19, 2013 issued new capital requirement for capital market operators with December 31, 2014 as deadline for operators to recapitalise.
A breakdown of the new capital requirement showed that broker/dealer now requires a minimum capital N300 million or an increase of 328.57 per cent compared with the initial capital of N70 million.
Brokers are now required to increase their operating capital to N200 million from N40 million, while a dealer’s minimum capital now stands at N100 million against N30 million.
Issuing house operational capital requirement 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 requirements framework, a registrar’s operational capital has been reviewed up to N150 million from N50 million.
Trustees capital requirement also rose to N300 million from N40 million, while that of rating agency has appreciated from N20 million to N150 million.
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