Association of Stockbroking Houses of Nigeria, ASHON, says it will cooperate with the Securities and Exchange Commission, SEC to ensure the best approach for stockbrokers’ capitalisation exercise.
President of ASHON, Mr Emeka Madubuike, told the News Agency of Nigeria, NAN on Monday in Lagos that the association was working with the capitalisation committee instituted by SEC
Madubuike said that the association would do everything within its powers to ensure that members remained in business after Sept. 30, 2015 deadline.
He said the association would continue to discuss with the new management of SEC on the best approach to the capitalisation without creating unnecessary pressure on the market.
He, however, expressed optimism that the deadline extension would afford operators more opportunity to strategise.
The ASHON president said that all the stockbroking firms operating in the market had submitted their 2014 audited results to SEC and the Nigerian Stock Exchange (NSE) as directed by the commission.
Madubuike said the results were submitted in March, noting that operators were still awaiting the outcome.
NAN reports that SEC on Dec. 19, 2013 issued a new capital requirement for capital market operators with December 31, 2014 as deadline for operators to recapitalise.
But the deadline was extended to Sept. 30, 2015 by the commission in December 2014 following pressure and protest by stockbrokers.
The apex capital market regulator increased the minimum capital base for broker/dealer by 329 per cent from the existing N70 million to N300 million.
Broker, which currently operates with a capital base of N40 million, will now be required to have N200 million, representing an increase of 400 per cent.
The 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.
Registrars 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 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 dealing 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.