Securities and Exchange Commission (SEC) has delisted 84 Capital market Operators (CMOs) from all activities in the market.
This development shows the current economic hardship is taking its toll on the financial services sector where operators are failing to meet up with requisites to continue to operate in their respective markets.
Only last week, the insurance regulator, National Insurance Commission NAICOM, revoked the licences of 104 insurance brokers, pushing over 1000 to the labour market.
Prominent about the insurance brokers is Glanvil Einthoven , a subsidiary of the Odu’a conglomerates. Glanvil alone boast of over 400 staff. They are now jobless.
By the latest action of SEC, the CMOs that have their licences revoked comprise of private Equity Fund Manager; Broker/Dealer; Fund/Portfolio Manager; Issuing House; Rating Agency; Corporate Investment Adviser and Trustee.
The Commission also warned stakeholders including the Nigerian Stock Exchange (NSE), Institute of Stockbrokers (CIS), Central Securities Clearing System (CSCS) Plc, to desist from dealing with the delisted CMOs.
The licence revocation is the outcome of the recapitalization by the regulator and an indication that only 10 CMOs had heeded the regulator warning that was earlier given and might have to undergo merger or acquisition process.
Early this month, the apex capital market regulatory body listed 94 CMOs registered for consistently failing to render their statutory returns to the Commission.
SEC also noted that these CMOs were unable to comply with the new minimum capital requirements before its deadline which expired on September 30, 2015.
According to SEC statement last week, “In view of this fact, the Commission hereby directs the affected CMOs to make presentations to the Commission, on or before December 4, 2015, giving reasons why their registration as CMOs should not be cancelled.”
Meanwhile, SEC recently mandated CMOs to comply with the new minimum capital requirement at which over 97 percent complied.
The final list of CMOs that met the deadline represents 437 out of the total 449 registered capital market operators. They list was published after the necessary capital verification that was conducted on September 30,2015 deadline.
The apex capital market operators on its website, listed four operators that have requested its approval and court order for merger.
Findings by our correspondent revealed that 30 Brokers and 174 Broker/Dealers have complied.
The apex regulator of the nation’s capital market increased minimum capital base for broker/dealer by 329 per cent from the existing N70 million to N300 million. A broking firm which operates with N40 million capital base is now compelled to have N200 million, representing an increase of 400 per cent.
While the minimum capital for dealer was raised by 233 per cent from N30 to N100 million, that of issuing houses (facilitators of new issues in the primary market) was increased to N200 million from N150 million.
The capital requirement for a company to underwrite issues was also raised from N100 to N200 million, just as share registration companies now have to raise their capital base from N50 to N150 million.
The minimum capital for corporate investment advisers was however retained at N5 million, unlike individual investment advisers who would only operate with a 300 per cent hike in capital base from N500,000 to N2 million.
To facilitate the smooth implementation of the new minimum capital requirements for operators, the CMC set up a market-wide “Implementation Committee on New Minimum Capital Requirement for CMOs,” comprising the SEC, NSE, CSCS, ASHON and all other capital market trade groups.
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