SEC insists on new capital base for capital market operators

Semiu Salami — Tue, 11 Mar 2014 16:43:28 +0000

The Securities and Exchange Commission (SEC) has said it would not succumb to stockbrokers’ blackmail on the new capital requirements for capital market operators.

The decision comes after a meeting between SEC and stockbrokers’ representatives to address the issue reportedly ended in a stalemate.

A senior official of the Commission who confided in our correspondent, said that the commission would not compromise its stance on the market standard because of the opposition of some stockbrokers to the re-capitalisation programme.

According to him, the market does not need many dealers with negative shareholders’ fund in the market.

The SEC source stressed that the commission would not compromise the market standard because of some brokers’ opposition and blackmail and would never be part of the proposed “capital segmentation” being clamoured by the some dealers.

Emeka Madubuike, President, Association of Stockbroking Houses of Nigeria (ASHON), admitted that the meeting betweeng its association and the executive management team did not yield any fruitful 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 released by SEC.

SEC had on Dec. 19, issued new capital requirement for capital market operators with December 31 as deadline for operators to re-capitalise.

A breakdown of the new capital requirement showed that a broker/dealer now requires a minimum capital N300 million, an increase of 328.57 per cent over the initial capital of N70 million.

A broker is now required to increase his capital to N200 million from N40 million, while a dealer’s minimum capital now stands at N100 million against the old N30 million.

An issuing house operational capital requirement also rose to N200 million from N150 million, while 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 risen to N300 million from N40 million, while that of rating agency from N20 million to N150 million.

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EFCC, stockbrokers partner to check money laundering

Semiu Salami — Tue, 21 Jan 2014 17:20:06 +0000

The Chairman of the Economic and Financial Crimes Commission, EFCC, Ibrahim Lamorde has called for collaboration between the anti-graft agency and the Association of Stockbroking Houses of Nigeria, ASHON, to rid the capital market of incidence of money laundering, fraud and imposters.

Lamorde who made this call on Tuesday when executive members of ASHON paid him a courtesy visit at the Commission’s head office, Abuja, said he was concerned about how proceeds of crime were invested in the capital market and called on the association to be vigilant and notify the Commission of suspicious transactions, especially when so called politically exposed person invest heavily in securities for under aged dependants.

He also charged the association to engage in sensitization and enlightenment campaign so that Nigerians could decipher a genuine stockbroker from a quack. ‘People find it difficult to identify the real brokers and if there are imposters you know of, that you are finding difficult to get, let us know” he said.

The EFCC chairman called on the ASHON members to tackle the problem of unclaimed dividends and the negative perception about the capital market. “The economy strives well if the capital market is doing very well and the integrity of the capital market depends on the brokers”.

Emeka Madubuike who led the 4-man delegation explained that the association was formed in 2006 to protect the interest of the members, ensure that businesses were done the proper way and reach out to other stakeholders within the economy involved in stock business and advocacy.

He solicited for the support of the Commission to tackle fraud and other related crimes in the industry, stressing that “Since the EFCC is interested in money laundering issues, it is pertinent that both organization work out modalities to combat it.”

He called for the organization of a workshop and training programme for both organizations which, according to him, will create better understanding of how the market works.

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SEC insists on new capital base for capital market operators

EFCC, stockbrokers partner to check money laundering