New capital for market operators out soon SEC
Securities and Exchange Commission (SEC) has worked out a new minimum capital base for all capital market operators.
Under the new regime that will be announced soon, the capital requirements will be reviewed upward to shore up their financial capacity.
At a media briefing after the Capital Market Committee (CMC)'s quarterly meeting in Lagos, on Thursday, SEC's director general, Ms Arunma Oteh, said the commission was already at the concluding stage of the new capital requirements for market operators.
According to Oteh, the board of SEC has also indicated the need to expedite action on the implementation of dematerialisation of share records and documents.
She disclosed that the CMC , which is a body of all capital market regulators, operators and stakeholders, was coming up with a blueprint for the market. The blueprint, she explained would be a 10-year master plan with quarterly milestones.
He added that the CMC would also bring out a capital market literacy plan and Islamic finance master plan, all meant to reposition the market to play its role in the development of the economy.
The Director General also used the occasion to explain why the waiver granted on stock market transactions cost by President Goodluck Jonathan last December was yet to the implemented.
She said it was due to the delay in gazzetting the order.
The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, had last December told the capital market community of the approval to eliminate stamp duties and VAT on stock market transactions as part of efforts to resuscitate the market.
The announcement came along with the forbearance package given to 84 stockbrokers. While the forbearance package is being implemented, the directive on stamp duties and VAT is not in force.
Oteh said the implementation was being delayed because it had to be gazzetted. According to her, the process involves the Ministry of Finance, Ministry of Justice and Federal Inland Revenue Service (FIRS).
She explained that the delay was due to the number of agencies involved in the process, assuring, however, that very soon the process should be concluded.
On the forbearance package, Oteh noted that the 54 brokers, who accepted the offer were already signing agreements with the Asset Management Corporation of Nigeria (AMCON).
Market operators include stockbroking firms, issuing houses, fund managers, custodians, trustees, and investment advisory firms, share registration companies, corporate secretaries, depository, securities exchange, venture capital, receiving bankers and underwriters among others.
A recent assessment of securities regulation in Nigeria by the International Monetary Fund (IMF) had urged increase in capital of broker-dealers.
The Bretton Wood body in its review of Nigeria's level of implementation of the International Organisation of Securities Commissions (IOSCO) Principles, feared that that , new risks might arise if the weak financial condition of many broker-dealers remained unaddressed.
'The SEC should promptly implement a major overhaul of the capital requirements applied to broker-dealers, by raising their initial capital requirements and requiring them to maintain sufficient risk-based capital on an ongoing basis,' the report stated.