By David Agba
Abuja
The Securities and Exchange Commission (SEC) has directed all capital market operators proposing reclassification like broker/dealer to sub-broker) or seeking to reduce their registered functions, in view of the new minimum capital requirement, to notify the commission not later than July 31, 2015.
This directive which was via a circular issued by the commission also applies to capital market operators opting for mergers, acquisitions or any other form of business combination.
The directive also applies to capital market operators 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 in 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, 2015.
Minimum capital base for broker and dealer was increased by 329 per cent from the existing N70 million to N300 million. The 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 the 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.
