The Nation Newspaper

Tag: SEC

  • SEC to grow non-interest market products by 25%

    SEC to grow non-interest market products by 25%

    • Mulls Sharia Advisory Council

    The Securities and Exchange Commission (SEC) said it is planning to grow non-interest capital market products to 25 per cent of the overall market capitalisation.

    Its Director-General, Mr Mounir Gwarzo gave the hint in Abuja during a meeting with the Lord Mayor of London, Alderman Alan Yarrow.

    Represented by Executive Commissioner, Corporate Services at SEC,  Zakawanu Garuba, the DG said the regulatory body was also considering modalities for establishment of  a Sharia Advisory Council as a body of experts to advise on non-interest product applications.

    He said: “Our goal is to boost non-interest capital market product innovation so that the segment can be at least a quarter (25 per cent) of the overall market capitalisation.”

    The SEC he said wants “to build a strong regulatory regime for non-interest products, encourage stakeholders in the non-interest capital market and ensure the emergence of Nigeria as a prominent non-interest capital market hub both at the regional level and globally.”

    To boost liquidity of non-interest products, he said SEC is “working with a committee to support the FMDQ platform to enable secondary market trading of the products. We are also engaging the Central Bank of Nigeria (CBN) to obtain liquidity status for non-interest products (especially the sukuk).”

    All these efforts, he noted are hinged on the fact that “Nigeria has more than 80 million Muslims compared to Malaysia’s total population of 30 million. In addition, Nigeria has a larger economy than Malaysia’s, being the largest economy in Africa.”

  • SEC expels stockbrokers over fraud, market manipulation

    The Nigerian Stock Exchange (NSE) has indicted two stockbroking firms and a stockbroker for fraudulent sales of investors’ shares and manipulation of share price at the stock market.

    A circular on the indictment obtained exclusively by The Nation indicated that the stockbrokers were allegedly involved in multi-million Naira shares fraud. The indicted stockbrokers included Fittco Securities Limited, Resort Securities and Trust Limited and Mr Agomuo Chidi Solomon, a trader at the NSE.

    According to the indictment sheet, Fittco Securities Limited’s dealing member license has been revoked and the firm expelled from the Exchange due to alleged unauthorised sales of clients’ shares. Fittco Securities was also directed to pay a fine of N32.37 million.

    Resort Securities & Trust Limited was suspended for one month and directed to pay a fine of N3. 74 million following indictment on alleged share price manipulation.  Agomuo Chidi Solomon, an authorized dealing clerk of the NSE and a broker with Resort Securities, had his dealing certificate withdrawn in relation to the alleged share price manipulation.

    The indictment warned capital market operators from dealing with the indicted stockbrokers, citing rules that blacklisted indicted officials from further operation or employment in the market.

    Article 144(c) of the Rules and Regulations Governing Dealing Members (Amendments and Additions – Part II) – Specific Actions Requiring Prior Consent of The Exchange states that a dealing member must obtain prior written consent of the Exchange to employ directors, authorized clerks or other persons including principal officers such as the chief executive officer, chief finance officer, chief compliance officer and chief risk officer, who have been indicted by the Exchange or Securities and Exchange Commission.

    Others that required clearance from the Exchange before employment included any person who was an officer or employee of a dealing member expelled from the Exchange , any person expelled as an authorized clerk or its equivalent, from any other exchange; any person refused admission as a member of the Chartered Institute of Stockbrokers or any person expelled from its membership; any person expelled as a member of any professional association or institute and any person who is insolvent or has been convicted of theft, fraud, forgery, or any other crime involving dishonesty.

    The Nation had recently reported exclusively that the Economic and Financial Crimes Commission (EFCC) was investigating 10 stockbroking firms and 12 individual stockbrokers and officials as part of a large-scale crackdown on shares fraud that has seen 31 stockbroking firms and several stockbrokers internally investigated and sanctioned by the NSE.

    Two official reports on shares fraud, also known as unauthorised sales of investors’ shares, obtained by The Nation had indicated that the NSE had invited the EFCC to further investigate and prosecute 12 stockbroking firms and 21 stockbrokers and officials, who were primarily indicted by the internal investigations of criminal financial fraud.

     

     

    The EFCC has already concluded investigations and charged two stockbroking firms and nine persons to court while the anti-fraud agency is currently investigating 10 stockbroking firms and 12 persons connected with the firms or individually cited for shares fraud.

    All the cases referred to the EFCC were initially investigated and indicted by the Disciplinary Committee of the Council of the Exchange, NSE’s adjudicatory body which deals with heinous market infractions and investors’ complaints.

    The reports indicated that the all the firms and officials were allegedly indicted by the disciplinary committee for unauthorised sale of investors’ shares while some others were also indicted for issuance of dud cheques, impersonation and illegal conversion of dividend warrants.

    An official of the NSE at the weekend confirmed the cases under investigation by the EFCC, noting that the two reports were up to date and accurately represented the state of affairs as at press time.

    The investigations and prosecutions by the EFCC highlighted the anti-fraud campaign at the stock market to checkmate hard-pressed stockbroking firms and unscrupulous officials, who fiddled with investors’ shares.

    A report on shares fraud over the past 42 months indicated that 31 firms were investigated for unauthorised sale of shares. The report by the NSE covered the period between January 2012 and June 15, 2015.

    The report showed that nearly half of the shares frauds have been completed and the indicted stockbroking firms made to restitute the investors, a general reference to order to buy back the shares or pay the investor the value of the shares and all his entitlements.

    According to the report, 15 stockbroking firms and four individuals have pending cases, although the NSE has taken preemptive measure of suspending the stockbroking firms and stockbrokers. The pending cases have been referred to the disciplinary committee of the council of the NSE.

     

     

     

    The NSE had launched an online whistleblowing portal through which investors and other stakeholders can tip off the Exchange on perceived or known infractions. The online portal, known as X-Whistle, allows members of the public to submit information without disclosing their identity while it also provides reference that allows the whistleblower to track NSE’s response and investigation on the tip off.

     

     

     

     

  • SEC advises investors on choice of stockbrokers, others

    Securities and Exchange Commission (SEC) has advised investors to check the regulatory status of any capital market operator before entering into new business relationships or sustaining existing ones with a view to ensuring that they are dealing with duly authorized and compliant operators.

    SEC, through the market-wide Implementation Committee on new minimum capital requirement for capital market operators, said investors should verify the compliance status of capital market firms by checking the list posted on the Commission’s website. To facilitate the smooth implementation of the new minimum capital requirements for operators, the Capital Market Committee-the umbrella body for capital market stakeholders under the coordination of SEC, had set up a market-wide “Implementation Committee on New Minimum Capital Requirement” comprising the SEC, Nigerian Stock Exchange (NSE), Central Securities Clearing System (CSCS), Association of Stockbroking Houses of Nigeria (ASHON) and all other capital market trade groups.

    The advice came on the heels of the expiration of the September 30, 2015 deadline and the publication of the provisional list of capital market firms that have met the new minimum capital requirements for their functions by the apex capital market regulator at the weekend.

    As a guide for investors with non-compliant firms and those seeking to change from one firm to another, the Commission outlined the guidelines that should be adhered to by investors, target firms and the Central Securities Clearing System (CSCS) where an investor wishes to move his stock account from an under-capitalised broker-dealer to a broker-dealer or broker that has complied with the minimum capital requirement.

    The procedure for moving stock accounts include where the broker-dealer has not met the new minimum capital requirement, the investor should approach a capitalised broker-dealer or broker for engagement. The investor should undergo a Know Your Customer (KYC) process with the new firm. The broker-dealer or broker should open a CSCS account for the investor using the investor’s existing Clearing House Number (CHN) from his former Brokerage Firm. The investor should give a mandate to the target firm to transfer his account from the under-capitalised firm to the new firm.

    Also, the investor would be required to submit evidence of purchase of the shares such as contract notes, receipts of purchase, dividend stubs or confirmation of holdings from the registrar’s office, signed by the managing director of the Registrar firm to the target firm. The new target firm would initiate inter-member transfer request with the managing director of the firm expected to go to the CSCS to sign off the indemnity form. Then, the CSCS shall process the request and notify the broker-dealer or broker through the CSCS website.

     

     

     

     

  • SEC begins capital market firms’ audit

    The Securities and Exchange Commission  (SEC) would soon launch comprehensive investigative audits of capital market firms as part of post-recapitalisation process with a view to ascertaining the veracity of assets of the firms.

    SEC at the weekend released a provisional list of 972 firms that have been cleared to operate in the capital market after the Commission drew the curtain on a two-year recapitalisation.

    The list included 437 capital market operators that were cleared to have met the new minimum capital requirements by the September 30, 2015 deadline, nine other operators that were in the process of merging into four companies, six self-regulatory organisations and a long list of 525 capital market consultants and experts.

    The Commission confirmed that the list was a provisional list noting that the final list of registered and certified capital market operators would be made public after capital verification. SEC stated that it would be engaging audit firms, without providing further details.

    A source in the know said the Commission plans to conduct stress and impairment tests on the assets filed in by the capital market firms and to further confirm the authenticity of the claims by the firms.

    The source said top on the list of accounting firms being considered by the Commission were KPMG and Akintola Williams Deloitte adding that the Commission decided on the investigative audits to avoid the repeat of bubble assets that undermined the previous recapitalisation exercise, especially in the banking and insurance sectors.

    Among the capital market operators that retained all their registered functions included GTI Capital Limited, issuing house; GTI Securities, broker/dealer; Capital Assets, broker/dealer, issuing house and fund/portfolio manager; Cowry Asset Management Limited, venture capital manager, corporate investment adviser and issuing house and Cowry Securities Limited, which retained its dual functions as a broker/dealer.

    Also, all members of Meristem Group retained their functions including Meristem Registrars, Meristem Securities, Meristem Stockbrokers, Meristem Trustee and Meristem Wealth Management Limited.

    Others included Access Bank, Africa Prudential Registrars, Afrinvest West Africa Group, Akintola Williams Deloitte, APT Securities And Funds, Capital Bancorp, Chapel Hill Denham Management Group, Citi Bank Nigeria, Diamond Bank, Ecobank Nigeria, FBN Capital, FCMB, Fidelity Bank, First Bank of Nigeria, Flobal Trust, FSDH Group, Guaranty Trust Bank, Heritage Bank, JAIZ Bank, Lotus Capital, Phillips Consulting Ltd, Pricewaterhouse Coopers, Rand Merchant Bank Nigeria,              Skye Bank, Stanbic IBTC Group, Standard Chartered Bank, Sterling Bank, Trust Yields Securities,  United Bank for Africa, Union Bank of Nigeria, United Capital Group, Unity Bank, Vetiva Capital Management Group, Wema Bank and Zenith Bank Plc, among others.

    SEC in December 2013 announced major increases in minimum capital requirements for capital market functions under a new minimum capital structure that was initially scheduled to take off by January 1, this year., 22015. It however extended the deadline to September 30, 2015.

    Minimum capital base for broker and dealer was increased 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. Trustees, rating agencies and portfolio and fund managers had their minimum capital base increased by 650 per cent each from N40 million, N20 million and N20 million to N300 million, N150 million and N150 million respectively. 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.

     

     

     

     

     

  • BGL, SEC case eroding confidence in capital market, say investors

    BGL, SEC case eroding confidence in capital market, say investors

    Some investors in the capital market whose funds are trapped in BGL Plc have decried the delay in the resolution of the case between the group and the Security and Exchange Commission (SEC).

    They said the delay in dispensation of the case at a Federal High Court sitting in Lagos is affecting them and further eroding  confidence in the market.

    The SEC had, in a public notice, suspended BGL Plc, its subsidiaries and sponsored individuals from all activities in the Nigerian capital market, following complaints by over 40 investors  against BGL.

    BGL and its subsidiaries had, through an ex parte application, obtained an order restraining the SEC from enforcing and implementing the suspension.

    The order of Justice Mohammed Idris prevented  the SEC from hearing the case brought by the 40 aggrieved group in the capital market against the BGL Group.

    Prior to this ex-parte order, the SEC had invited BGL and its subsidiaries to the Administrative Proceeding Committee (APC) hearing then scheduled for August 4 and 5, 2015.

    The SEC APC is a body established pursuant to Section 310 of the ISA for the purpose of resolving disputes in the capital market and giving opportunity for fair hearing to capital market operators and other institutions in the market who are perceived to have violated or have actually violated or threatened to violate the provisions of the ISA and the SEC rules and regulations or such operators against whom investors have lodged complaints.

    Respite came the way of the aggrieved investors when last week another judge, Justice M.N. Yunusa, vacated the ex parte orders obtained by BGL.

    Justice Yunusa, who presided over the case as vacation judge on  September 17, 2015, overturned the restraining orders issued by Justice Saliu Saidu, saying he strongly believed that BGL obtained those orders from Justice Saidu by concealing material facts.

    He equally turned down BGL’s prayer to stay proceedings in the case, pending the outcome of the SEC petition against Justice Saidu.

    By overturning the ex parte orders that had emasculated the SEC and prevented it from bringing BGL before the  APC, Justice Yunusa had given investors hope that justice was finally in sight.

    He adjourned the case to Tuesday, September 22, 2015 when he was expected to give the third ruling.

    Things, however, took a different dimention at the resumed hearing of the matter when Justice Yunusa  announced that he could no longer deliver the ruling because the case had been reassigned to another Judge by the Chief Judge of the Federal High Court.

    This would be the third time the case was reassigned. First, it was passed from Justice Saliu Saidu to Justice Mohammed Idris and then to Justice Yunusa.

    Some of the investors who spoke on condition of anonymity said the this adjournment would further delay the hearing of this matter.

    “It is important to note that in all this, it is we the investors,   who are suffering because the SEC who is statutorily empowered by the Investments and Securities Act (ISA) to protect investors and the capital market as a whole, is prevented from bringing BGL and its subsidiaries before the SEC APC so as to address the complaints brought against the Group by over 40 investors,” one of the investor said.

  • Recapitalisation: SEC compiles list of compliant capital market operators

    The Securities and Exchange Commission (SEC) is putting finishing touches to the final list of capital market operators with adequate minimum capital base, seven days to the deadline. They are the ones which will continue with their business in the fourth quarter.

    A source at SEC confirmed the development, saying this arose following the receipt of final updates from capital market operators.

    The source said the Commission was working to ensure that the market has a smooth transition from the previous capitalisation to the new capital base.

    SEC is expected to revoke licences of operators that fail to meet the September 30 deadline.

    SEC in December 2013 announced major increases in minimum capital requirements for capital market functions under a new minimum capital structure that was initially scheduled to take off by January 1, 2015. It, however, extended the deadline to September 30.

    Minimum capital base for broker and dealer was increased by 329 per cent from the existing N70 million to N300 million. Broker, which currently operates with capital base of N40 million, will  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 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. Trustees, rating agencies and portfolio and fund managers had their minimum capital base increased by 650 per cent each from N40 million, N20 million and N20 million to N300 million, N150 million and N150 million. A  Registrar will have a minimum capital base of N150 million as against the 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.

    The Nation had reported exclusively that the Commission had directed all capital market operators to file necessary additional updates to their statutory filings with the Commission in preparation for final review of the compliance status of each operator.

    A market source in the know of the directive said market operators are expected to file any additional information to their last filing with apex regulator of the capital market. The additional information report is expected to highlight changes that had taken place in the firms’ assets and other variables since the submission of the second quarter returns earlier sent to SEC.

    The source said SEC appeared to have set in motion the process for the final phase of the recapitalisation compliance review noting that most operators saw the latest directive as the last chance to make case for their compliance.

    The additional information update is expected to highlight changes in capital base, business combination; either merger or acquisition, any changes in number of functions registered for, subsisting applications with the market regulators, changes in board of directors and executive management, additional investments in key operational areas and other information on changes that might have occurred in the past 11 weeks.

    SEC has repeatedly ruled out any further extension of the September 30, 2015 deadline. The apex capital market regulator says that any operator that failed to comply with the new capitalisation will be automatically delisted from the market. SEC’s compliance timetable indicates that a list of the compliant operators will be published on Friday October 2. October 1 is a national holiday in commemoration of Nigeria’s Independence Day.

    SEC on August 31 drew the curtain on a preliminary deadline for capital market operators to file notifications for mergers and acquisitions or any reclassification of their functions. SEC had initially given a deadline of July 31 for the market operators to formalise any business combination and reclassification and file the necessary information with the apex capital market regulator. The Commission later extended the deadline to August 31, 2015.

    In a July 4 circular to all capital market firms, the apex capital market regulator directed all capital market operators which might have opted for mergers, acquisitions or any other form of business combination as a vehicle to meet the new minimum capital requirements to file their notifications with the Commission not later than July 31, 2015.

    The directive also applied to capital market operators proposing reclassification or reduction of their registered functions, including those seeking to downsize from stockbroker to sub-broker, broker-dealer to either broker or dealer and from multiple functions to a single function, among others.

  • SEC reaffirms suspension order on BGL Group

    Securities and Exchange Commission (SEC) has reaffirmed its earlier suspension of BGL Group and its sponsored individuals.

    This followed the September 17 discharge of the ex-parte order obtained against SEC by BGL Plc and its subsidiaries.

    The Federal High Court had on September 17 in Suit No. FHC/L/CS/767/15; BGL Plc & Ors Vs Securities and Exchange Commission, discharged the ex-parte order obtained by BGL Plc and its subsidiaries on May 27, 2015. The order directed that the status quo should be maintained, halting further action by SEC, including administrative trial of BGL’s officials.  SEC had summoned BGL and its principal officials to its Administrative Proceedings Committee (APC), which was scheduled to hold between August 4 and 5, 2015. The APC hearing in SEC APC/01//2015 Rivers State Ministry of Finance & 31 othersVS BGL PLC & 31 Others was postponed because of the Federal High Court order.

    In a statement signed by the management of SEC, the Commission noted that “in view of the Courts ruling, BGL, its subsidiaries and sponsored individuals remain suspended from operating in the Nigerian capital market”.

    “The Nigerian Stock Exchange (NSE), Central Securities Clearing System CSCS, Financial Market Dealers Quotation (FMDQ) Plc, Nigeria Association of Securities Dealers  (NASD) Plc and the general public should further note that the directives of the Commission in its public notice dated the 21st of May 2015 still subsists,” SEC stated.

    The Commission in May came down heavily on BGL, one of Nigeria’s leading investment banking groups, with the suspension of the BGL Group and its subsidiaries from all capital market activities.

    SEC said its decisions were based on the “report of a detailed investigation into the various complaints received from investors against subsidiaries of BGL Group”.

    SEC had late April intervened in the operations of BGL Group Plc, suspended its board and set up an interim management board for the group. The interim management board, headed by a former president of Chartered Institute of Stockbrokers (CIS), Mr Oladipo Aina, was mandated to conduct full investigation into the operations of BGL Group. Other members of the interim board were Mr. Abubakar Ambursa, Mrs. Hafsat Rufai, Ms. Temitayo Siyanbola and Ms. Tonne Ladipo-Ajayi.

    On the basis of the investigation report, SEC announced the suspension of BGL Asset Management Limited, BGL Capital Limited and BGL Securities Limited from all capital market activities.

    The Commission also directed that all major officials and sponsored individuals of BGL Asset Management Limited, BGL Capital Limited and BGL Securities Limited whose particulars are contained in the Commission’s record as at December 2014 be suspended from performing any capital market activity.

    SEC, particularly, cited Mr. Albert Okumagba, the group managing director of BGL Group and directed that Okumagba, who was the president of CIS before the April sack of the board, should cease to be a registered sponsored individual with the Commission following the withdrawal of the registration of BGL Plc as a capital market operator.  With this directive, Okumagba, one of the most influential capital market operators, will therefore no longer be entitled to carry out capital market activities.

    Besides, the apex capital market regulator stated that it has referred what it described as “suspicious transactions” observed in the course of the investigation to the appropriate law enforcement agencies for further investigation.

    According to the statement, BGL Asset Management Limited, BGL Capital Limited and BGL Securities Limited and all individuals involved in the management of the companies have also been referred to the Administrative Proceedings Committee (APC) of SEC for further trial.

    SEC has postponed its hearing on the complaints levelled against BGL Plc by more than 30 investors following a Federal High Court order which directed the apex capital market regulator not to take any further action on the case.

  • Court validates BGL’s suspension from capital market

    The Federal High Court in Lagos on Thursday validated the suspension of BGL Group from the capital market by the Securities and Exchange Commission (SEC).

    Justice Mohammed Yunusa nullified an interim injunction barring SEC from expelling the group from all capital market activities over alleged malpractices.

    BGL was accused of owing investors about N5.7billion, including the Rivers State Government.

    SEC reportedly received about 40 petitions over BGL’s alleged failure to return investments at maturity.

    In its preliminary objection to BGL’s suit, the commission said the group was indebted to investors to the tune of N5, 769,993,553.67 as at June 2.

    [ad id=”403656″]It added that BGL was having severe liquidity problems and has been running at a loss at over N48billion as at last December.

    According to SEC, BGL Asset Management Limited, contrary to its mandate, wholly transfers funds received from the investing public to BGL Plc without engaging in any form of Fund/Portfolio Management.

    But BGL had on May 27obtained an order restraining SEC from “holding and or conducting any trial or hearing in respect of the alleged complaints against the plaintiff ” and from giving effect to the ban pending the suit’s determination.

     

  • Buhari sacks FCT internal revenue chief, others

    President Muhammadu Buhari has ordered the immediate removal of heads of Federal Capital Territory (FCT) Internal Revenue Service, Secondary Education Board (SEC) and the Universal Basic Education Board (UBEB).

    According to the Deputy Director/Chief Press Secretary in the FCT, Muhammad Sule, the announcement was contained in a letter addressed to the FCT Permanent Secretary, Engr. John Chukwu, on Thursday.

    He said the directive applies to all the Boards of the FCT parastatals, agencies, institutions and government owned companies.

    “President Muhammadu Buhari has approved the immediate removal of the Chairmen of the FCT Internal Revenue Service, Secondary Education Board (SEB) and Universal Basic Education Boards (UBEB).

    “The development was contained in a letter with reference (NO. SGF.19/S.81/T1/97) sent to the FCT Permanent Secretary, Engr. John Obinna Chukwu, on Wednesday, September 9, 2015 by the Secretary to the Federal Government,” he stated.

     

  • Recapitalisation: SEC set for final review

    Ahead the September 30 deadline for compliance with the new minimum capital requirements for capital market operations, the Securities and Exchange Commission (SEC) has directed all operators to file necessary additional updates to their statutory filings with the Commission in preparation for final review of the compliance status of each operator.

    A source  said market operators are expected to file any additional information to their last filing with the regulator. The additional information report is expected to highlight changes that had taken place in the firms’ assets and other variables since the submission of the second quarter returns earlier sent to SEC.

    The source said SEC appeared to have set in motion the process for the final phase of the recapitalisation compliance review, noting that most operators saw the latest directive as the last chance to make case for their compliance.

    Already, some trade groups have been mobilising their members to comply with the directive  in addition to setting up help desks to help firms that need clarification and assistance on the required information.

    A trade group, in a circular to its members, described the directive as “very urgent and important”, urging members to comply expeditiously by providing the required information to SEC.

    The additional information update is expected to highlight changes in capital base, business combination; either merger or acquisition, any changes in number of functions registered for, subsisting applications with the market regulators, changes in board of directors and executive management, additional investments in key operational areas and other information on changes that might have occurred in the past 11 weeks.

    SEC has repeatedly ruled out any further extension of the September 30 this year deadline. The regulator says  any operator that failed to comply with the new capitalisation will be automatically delisted from the market. SEC’s compliance timetable indicates that a list of the compliant operators will be published on October 2. October 1 is a national holiday in commemoration of Nigeria’s Independence Day.

    A source at the SEC yesterday said nothing has changed from the regulator’s position on the deadline and compliance schedule.

    SEC had last week drew curtain on a preliminary deadline for capital market operators to file notifications for mergers and acquisitions or any reclassification of their functions. SEC had initially given a deadline of July 31 for the market operators to formalise any business combination and reclassification and file the necessary information with the apex capital market regulator. The Commission later extended the deadline to August 31.

    In a July-4 circular to all capital market firms, the regulator directed all operators which might have opted for mergers, acquisitions or any other form of business combination as a vehicle to meet the new minimum capital requirements to file their notifications with the Commission not later than July 31.

    The directive also applied to capital market operators proposing reclassification or reduction of their registered functions, including those seeking to downsize from stockbroker to sub-broker, broker-dealer to either broker or dealer and from multiple functions to a single function among others.

    SEC had in December 2013 announced major increases in minimum capital requirements for capital market functions under a new minimum capital structure that was initially scheduled to take off by January 1. It however extended the deadline to September 30,.

    Minimum capital base for broker and dealer was increased 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. Trustees, rating agencies and portfolio and fund managers had their minimum capital base increased by 650 per cent each from N40 million, N20 million and N20 million to N300 million, N150 million and N150 million respectively.

    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.